Standard Costs, Decomposition of Budget Variances, Direct Materials and Direct Labor Haversham Corporation produces dress shirts. The company uses a standard costing system and has set the following standards for direct materials and direct labor (for one shirt): Fabric (1.5 yds. 54.20 $2.80) Direct labor (1.1 22.00 hr. @ $20) Total prime cost $26.20 During the year, Haversham produced 9,800 shirts. The actual fabric purchased was 14,600 yards at $2.74 per yard. There were no beginning or ending inventories of fabric. Actual direct labor was 10,900 hours Required: 1. Compute the costs of fabric and direct labor that should have been incurred for the production of 9,800 shirts. Direct materials Direct labor 2. Compute the total budget variances for direct materials and direct labor. Direct materials $ Direct labor 3. Break down the total budget variance for direct materials into a price variance and a usage variance. Materials Price Variance $ Materials Usage variance $ Prepare the journal entries associated with these variances. If an amount box does not require an entry, leave it blank or enter "O". Price Variance Usage 4. Break down the total budget variance for direct labor into a rate variance and an efficiency variance. Labor Rate Variance Labor Efficiency Variance $ Prepare the journal entries associated with these variances. If an amount box does not require an entry, leave it blank or enter "0", Standard Costs, Decomposition of Budget Variances, Direct Materials and Direct Labor Haversham Corporation produces dress shirts. The company uses a standard costing system and has set the following standards for direct materials and direct labor (for one shirt): Fabric (1.5 yds. 54.20 $2.80) Direct labor (1.1 22.00 hr. @ $20) Total prime cost $26.20 During the year, Haversham produced 9,800 shirts. The actual fabric purchased was 14,600 yards at $2.74 per yard. There were no beginning or ending inventories of fabric. Actual direct labor was 10,900 hours Required: 1. Compute the costs of fabric and direct labor that should have been incurred for the production of 9,800 shirts. Direct materials Direct labor 2. Compute the total budget variances for direct materials and direct labor. Direct materials $ Direct labor 3. Break down the total budget variance for direct materials into a price variance and a usage variance. Materials Price Variance $ Materials Usage variance $ Prepare the journal entries associated with these variances. If an amount box does not require an entry, leave it blank or enter "O". Price Variance Usage 4. Break down the total budget variance for direct labor into a rate variance and an efficiency variance. Labor Rate Variance Labor Efficiency Variance $ Prepare the journal entries associated with these variances. If an amount box does not require an entry, leave it blank or enter "0