Standard Costs, Decomposition of Budget Variances. Direct Materials and Direct Labor EZ Tens Corporation producer Thirts. The company uses a standard conting witom and has set the following standards for direct material and direct tabor for ne shit Fabric (0.Byds 51.60) $1.26 Direct labor (0.1515) 1.50 Total primet $2.78 During the year, Ez Tees produced 124,000 T-shirt. The actual fabric purchased was 9,000 vardu at $1.95 per yerd. There were no beginning or ending wivestories of fabric. Actual direct aber was 13.500 hours at Required: 1. Compute the costs of fabric and direct labor that should have been incurred for the production of 124,000 Thirts Direct materials Accounting med Direct labor 2. Compute the total budget arances for direct materials and direct labor Direct materials Direct labor 3. Break down the total budget variance for direct materials into a price rance and a searance Materials Pric Variance Materials Use Variance 3. Break down the total budget variance for direct materials into a price variance and a usage variance. Materials Price Variance Materials Usage Variance S Prepare the journal entries associated with these variances. If an amount box does not require an entry, leave it blank. Price Variance Usage Variance 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. eBook Standard Costs, Decomposition of Budget Variances, Direct Materials and Direct Labor EZ Tees Corporation produces T-shirts. The company uses a standard costing system and has set the following standards for direct materials and direct labor (for one shirt): $1.28 Fabric (0.8 yds. @ $1.60) Direct labor (0.1 hr. @ $15) 1.50 Total prime cost $2.78 During the year. EZ Tees produced 124,000 T-shirts. The actual fabric purchased was 99,000 yards at $1.55 per yard. There were no beginning or ending inventories of fabric. Actual direct labor was 12,500 hours at $14.80 per hour