Question
The Scenario The following pertains to the Sit-Right chair manufacturers and their direct manufacturing inputs in making upholstered chairs: Budget data: Direct materials standards: Standard
The Scenario The following pertains to the Sit-Right chair manufacturers and their direct manufacturing inputs in making upholstered chairs: Budget data: Direct materials standards: Standard per chair is 3 square yards @ $10 per square yard. Direct labor standards: Standard per chair is 1/2 hour labor @ $20 per labor hour. Sit-Right planned to make and sell 21,000 chairs. Actual results: Actual number of chairs produced and sold was 20,000 chairs. Square yards of input actually purchased and used, 55,000. Actual price paid for direct materials, $577,500. Actual labor hours of input, 9,000. Actual direct manufacturing labor costs, $176,400. Required: Calculate the price and efficiency variances for direct materials and for manufacturing labor. For each variance, indicate whether it is Favorable or Unfavorable. Answer questions on the quiz, based on the direct cost variance measurements of the company.
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