The REDICO Company manufactures slippers that sell for $12.50 each pair. In 2019, the company made and sold 60,000 pair of slippers. . A pair of slippers equals one unit. The company had fixed manufacturing costs of $216,000. It also had fixed costs for administration of $79,525. The per-unit costs of each pair of slippers are as follows:

Direct Materials: $3.00

Direct Labor: $1.50

Variable Manufacturing Overhead: $0.40

Variable Selling Expenses: $1.10

Using the information above, perform a cost-volume-profit (CVP) analysis by completing the steps below. All CVP calculations should be completed in the REDICO Company Spreadsheet (attached).

The management of the REDICO Company would like to implement benchmarking. Standard costs have been established and are presented below. You will want to complete a variance analysis to include efficiency and price variances for materials (cloth and sole assemblies) and labor based on the following data:

Units Produced = 80,000

Units Sold = 60,000

Direct Materials Purchased and Used

Actual yards of cloth purchased and used: 128,000

Actual price incurred per yard: $1.25

Actual individual soles purchased and used: 161,808

Actual price per sole: $0.50

Direct Manufacturing Labor Used

Actual direct labor hours used: 15,748

Actual price per hour: $7.62

Direct labor costs: $120,000

Standard Rates

Standard labor hours per unit: 0.20

Standard labor price per hour: $7.50

Yards material per unit: 1.50

Standard price per yard: $1.15

Soles per unit: 2

Standard price per sole: $ .52

Companies can use variance analysis and benchmarking to measure performance based on their own historical experience as well as against competitors performance. This can be done by setting standards/budgets and comparing a completed variance analysis to results from prior periods or comparing them to competitors results. Using the information provided above, complete the following calculations (steps 1 and 2) in the REDICO Company Spreadsheet.

1. Calculate price variances for material and labor and denote whether they are favorable or unfavorable.

Requirement 1
Price Variances:
(Actual Price Standard Price) X Actual Quantity
	Actual	Standard	Actual Quantity	Variance	Favorable or Unfavorable
Cloth	$	$	X	$
Soles	$	$	X	$
Labor Price Variance	$	$	X	$