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): Fabric (1.5 yds. @ $2.80) $4.20 Direct labor (1.1 hr. @ $20) 22.00 Total prime cost $26.20 During the year, EZ Tees produced 9,700 T-shirts. The actual fabric purchased was 14,450 yards at $2.74 per yard. There were no beginning or ending inventories of fabric. Actual direct labor was 10,790 hours at $19.50 per hour.

Required:

1. Compute the costs of fabric and direct labor that should have been incurred for the production of 9,700 T-shirts. Direct materials $fill in the blank 40,740 Direct labor $fill in the blank 213,400

2. Compute the total budget variances for direct materials and direct labor. Direct materials $fill in the blank 867 Favorable Direct labor $fill in the blank 5,395 Favorable

3. Break down the total budget variance for direct materials into a price variance and a usage variance. Materials Price Variance $fill in the blank 867 Favorable Materials Usage Variance $fill in the blank 280 Favorable Question Content Area Prepare the journal entries associated with these variances. If an amount box does not require an entry, leave it blank. Price Variance Materials Materials Materials Direct Materials Price Variance Direct Materials Price Variance 867 Direct Materials Price Variance Accounts Payable Accounts Payable Accounts Payable 867 Usage Variance Work in Process Work in Process 280 Work in Process Direct Materials Usage Variance Direct Materials Usage Variance Direct Materials Usage Variance 280 Materials Materials Materials Question Content Area

4. Break down the total budget variance for direct labor into a rate variance and an efficiency variance. Labor Rate Variance $fill in the blank 5,395 Favorable Labor Efficiency Variance $fill in the blank 2,400 Favorable Question Content Area Prepare the journal entries associated with these variances. If an amount box does not require an entry, leave it blank. blank Work in Process Work in Process 2,400 Work in Process Direct Labor Efficiency Variance Direct Labor Efficiency Variance Direct Labor Efficiency Variance 2,400 Direct Labor Rate Variance Direct Labor Rate Variance Direct Labor Rate Variance 5,395 Wages Payable Wages Payable 5,395 Wages Payable not sure if my numbers are right can you work it from scratch