Sole Purpose Shoe Company is owned and operated by Sarah Charles. The company manufactures casual shoes, with manufacturing facilities in your state. Sarah began the business this year, and while she has a great deal of experience in manufacturing popular and comfortable shoes, she needs some help in evaluating her results for the year, and asks for your help.

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\fDirect Materials Under normal conditions , Sarah spends $8. 40 per unit of materials , and it will take 3. 6 units of material per pair of shoes . During July , Sole Purpose Shoe Company incurred actual direct materials costs of $63 , 810 for 7 , 090 units of direct materials in the production of 2 , 175 pairs of shoes ! Standard Cost* Actual Cost Standard Quantity\\ Actual Price* Actual Quantity* Standard Price* Standard Price* Actual Quantity =\\8 - Variance - Direct Materials* - Variance - Direct Materials* Favorable* Price - Variance Unfavorable* - Total Direct Materials Time Unfavorable* Quantity Favorable Rate Favorable Cost Rate Price Unfavorable* Rate Time Cost Time Quantity Quantity PriceDirect Labor Under normal conditions , Sarah pays her employees $8 .50 per hour , and it will take 2 .8 hours of labor per pair of shoes . During August , Sole Purpose Shoe Company incurred actual direct labor costs of $65 . 340 for 7 , 260 hours of direct labor in the production of 2 , 100 pairs of shoes . Standard Cost Actual Cost* Standard Hours Standard Rate* Actual Rate* Actual Hours\\ Standard Rate* Actual Hours\\ X X - Direct Labor* - Variance * - Direct Labor* - Variance* Unfavorable* Favorable* - Total Direct Labor ~ Variance* Favorable Quantity Unfavorable* Quantity Unfavorable* Rate Price Price Favorable* Cost Cost Time Quantity\\ Rate PriceBudget Performance Report Sarah has learned a lot from you over the past two months , and has compiled the following data for Sole Purpose Shoe Company for September using the techniques you taught her . She would like your help in preparing a Budget Performance Report for September . The company produced ? , GOD pairs of shoes that required 10, 500 units of material purchased at $3. 20 per unit and $ 100 hours of labor at an hourly rate of $8. 90 per hour during the month . Actual factory overhead during September was $2 4, 30.0 . When entering variances , use a negative number for a favorable cost variance , and a positive number for an unfavorable cost variance* Use the data in the following table to prepare the Budget Performance Report for Sole Furpose Shoe Company for September. Manufacturing Costs Standard Price\\ Standard Quantity\\ Standard Cost Per Unit* Direct materials $8 . 40 per unit 3.5 units per pair Direct labor FB. 50 per hour* 2 . & hours per pair Factory overhead $2. TO per hour\\ 2. 8 hours per pair 7.50 Total standard cost per pair $61 . 60 Sole Furpose Shoe Company Budget Performance Report For the Month Ended September 30 Standard Cost at Cost Variance - Manufacturing Costs Actual Costs* Actual Volume ( Favorable* ! Unfavorable* \\Direct materials \\Direct labor Factory overhead Total manufacturing costsFinal Questions Before Sarah makes any changes based on the Budget Performance Report for September , she wants to be sure she understands the results , and has the following questions for you . Answer the following questions '! ) and 12 ). All questions pertain to the September data. 1 . What caused the total cost variance for direct materials ? Check all that apply! The actual quantity of direct materials per unit was less than the standard quantity . The favorable price variance dominated the unfavorable quantity variance , causing the total cost variance for direct materials to be favorable . The unfavorable quantity variance dominated the favorable price variance , causing the total cost variance for direct materials to be unfavorable* D A factor other than those listed caused the total cost variance for direct materials* The actual price for direct materials per unit was less than the standard price . 2. What caused the total cost variance for direct labor ? Check all that apply*! The favorable time variance was larger than the unfavorable rate variance , causing the total cost variance for direct labor to be favorable . D A factor other than those listed caused the total cost variance for direct labor .* The actual rate for labor hours per unit was less than the standard rate* [ The unfavorable rate variance was larger than the favorable time variance , causing the total cost variance for direct labor to be unfavorable* D] The actual number of labor hours per unit was less than the standard number