SaraLouSaraLou, Inc. designs and manufactures T-shirts. It sells its T-shirts to brand-name clothes retailers in lots of one dozen.

SaraLou'sSaraLou's

May

20132013

static budget and actual results for direct inputs are as follows:

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SaraLouSaraLou

has a policy of analyzing all input variances when they add up to more than 10% of the total cost of materials and labor in the flexible budget, and this is true in May

20132013.

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."

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Requirement 1. Calculate the direct materials and direct manufacturing labor price and efficiency variances in May

20132013.

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

20132013.

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.)

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Actual

Price

Actual Input Qty x

May 2013

Results

Variance

Budgeted Price

Units

Direct materials

Direct labor

Total variance

Static Budget
Number of T-shirt lots (1 lot = 1 dozen)	600
Per Lot of T-shirts:
Direct materials	13 meters at $1.40 per meter = $18.20
Direct manufacturing labor	2.2 hours at $8.50 per hour = $18.70
Actual Results
Number of T-shirt lots sold	650
Total Direct Inputs:
Direct materials	9,230 meters at $1.65 per meter = $15,229.50
Direct manufacturing labor	1,365 hours at $8.60 per hour = $11,739.00