Question
Sheffield Clothiers is a small company that manufactures tall-men's suits. The company has used a standard cost accounting system. In May 2020,10,500suits were produced. The
Sheffield Clothiers is a small company that manufactures tall-men's suits. The company has used a standard cost accounting system. In May 2020,10,500suits were produced. The following standard and actual cost data applied to the month of May when normal capacity was14,500direct labor hours. All materials purchased were used.
Cost Element
Standard (per unit)
Actual
Direct materials9yards at $4.50per yard$419,320for95,300yards ($4.40per yard)Direct labor1.10hours at $14.00per hour$173,745for12,150hours ($14.30per hour)Overhead1.10hours at $6.30per hour (fixed $3.70; variable $2.60)$49,100fixed overhead $37,500variable overhead
Overhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs were $53,650, and budgeted variable overhead was $37,700.
(a)
Compute the total, price, and quantity variances for (1) materials and (2) labor.(Round per unit values to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 52.)
(1)Total materials variance$
Neither favorable nor unfavorable
Favorable
Unfavorable
Materials price variance$
Neither favorable nor unfavorable
Favorable
Unfavorable
Materials quantity variance$
Favorable
Neither favorable nor unfavorable
Unfavorable
(2)Total labor variance$
Unfavorable
Favorable
Neither favorable nor unfavorable
Labor price variance$
Unfavorable
Neither favorable nor unfavorable
Favorable
Labor quantity variance$
Favorable
Neither favorable nor unfavorable
Unfavorable
(b)
Compute the total overhead variance.
Total overhead variance$
Unfavorable
Favorable
Neither favorable nor unfavorable
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