SoundSmart manufactures headphone cases. During September $2024,$ the company produced and sold $108,000$ cases and recorded the following cost data:

$($Click the icon to view the cost data.$)$

Read the requirements.

Requirement $1.$ Compute the cost and efficiency variances for direct materials and direct labor.

Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable $($F$)$ or unfavorable $($U$).($Abbreviations used: $AC=$ actual cost; $AQ=$ actual quantity; FOH$=$ fixed overhead; $SC=$ standard cost; $SQ=$ standard quantity.$)$

Next compute the efficiency variances. Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable $(F)$ or unfavorable $().($Abbreviations used: $AC=$ actual cost; $AQ=$ actual quantity; FOH$=$ fixed overhead; $SC=$ standard cost; $SQ=s$ standard quantity $)$

Formula

Variance

Direct materials efficiency variance