Sara Lou, Inc. designs and manufactures fleece quarter-zip jackets. It sells its jackets to brand-name outdoor Outfitters in lots of one dozen Sara Lou's May 2017 static budget and actual results for direct inputs are as follows: (Click the icon to view the data) Click the icon to view additional information) Read the requirements Requirement 1. Calculate the direct materials and direct manufacturing labor price and efficiency variances in May 2017. What is the total flexible-budget variance for both inputs (direct materials and direct manufacturing labor) combined? What percentage is this variance of the total cost of direct materials and direct manufacturing labor in the flexible budget? Begin by calculating the direct materials and direct manufacturing labor price and efficiency variances in May 2017 Complete the actual results, price variance, and cost columns, then the efficiency variance and flexible budget columns Label each variance as favorable or unfavorable. (Round all answers to the nearest cent) Actual Price Actual Input Qty * Efficiency Flexible May 2017 Results Variance Budgeted Price Variance Budget Units 675 675 Direct materials 14,175.00 Direct labor 7.873,50 F U Total variance U U The total flexible-budget variance for both inputs (direct materials and direct manufacturing labor) combined is This variance is % of the total cost of direct materials and direct manufacturinn S HEM Read the requirements TURVALO The total flexible-budget variance for both inputs (direct materials and direct manufacturing labor) combined is S This variance is % of the total cost of direct materials and direct manufacturing labor in the flexible budget (Round the variance to the nearest cent and the percentage to two decimal places, XXX%) Requirement 2. Comment on the May 2017 results. Would you continue the "experiment" of using the new material? O A. Efficiencies have improved in the direction indicated by the production manager but Sara Lou should not continue to use the new material Use of the new material would require a change to the standard material price since the new material costs more than the old. Making this change to the cost accounting system is complex and very expensive B. Efficiencies have improved in the direction indicated by the production manager, Sara Lou should not continue to use the new material, though, since the overall efficiency variance is still unfavorable. OC. Efficiencies have improved in the direction indicated by the production manager---but, it is unclear whether they are a trend or a one-time occurrence Sara Lou should continue to use the new material , especially in light of its superior quality and feel, but it may want to re-examine the standard material price since the new material costs more than the old OD. Efficiencies have declined although the production manager had indicated they would improve Although the new material has superior quality and feel, Sara Lou should not continue to use the new material in light of the unfavorable efficiencies Choose from any list or enter any number in the input fields and then continue to the next question Data Table Static Budget Number of jacket lots (1 lot = 1 dozen) Per Lot of Jackets: 650 Direct materials 12 yards at $1.30 per yard = $15.60 1.6 hours at $8.20 per hour = $13.12 Direct manufacturing labor Actual Results 675 Number of jacket lots sold Total Direct Inputs: Direct materials 9,450 yards at $1.50 per yard = $14,175.00 945 hours at $8.30 per hour = $7,843.50 Direct manufacturing labor Print Done More Info - X Sara Lou has a policy of analyzing all input variances when they add up to more than 8% of the total cost of materials and labor in the flexible budget, and this is true in May 2017. The production manager discusses the sources of the variances: "A new type of material was purchased in May. This led to faster cutting and sewing, but the workers used more material than usual as they learned to work with it. For now, the standards are fine." Print Done anager had indicated they would improve. Although the new @ Requirerlents 1. Calculate the direct materials and direct manufacturing labor price and efficiency variances in May 2017. What is the total flexible budget variance for both inputs (direct materials and direct manufacturing labor) combined? What percentage is this variance of the total cost of direct materials and direct manufacturing labor in the flexible budget? 2. Comment on the May 2017 results. Would you continue the "experiment" of using the new material? Print Done