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Ultra, Inc, manufactures a full line of well-known sunglasses frames and lenses. Ultra uses a standard costing system to set attainable standards for direct materials,

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Ultra, Inc, manufactures a full line of well-known sunglasses frames and lenses. Ultra uses a standard costing system to set attainable standards for direct materials, labor, and overhead costs. Ultra reviews and revises standards annually, as necessary. Department managers, whose evaluations and bonuses are affected by their department's performance, are held responsible to explain variances in their department performance reports. Recently, the manufacturing variances in the Delta prestige line of sunglasses have caused some concern. For no apparent reason, unfavorable materials and labor variances have occurred. At the monthly staff meeting, John Puckett, manager of the Delta line, will be expected to explain his variances and suggest ways of improving performance. Puckett will be asked to explain the following performance report for the current year Units sold Kevenues Variable manufacturing costs Fixed manufacturing costs Gross margin 7,800 $608,400 273,000 114,000 221,400 7,300 $576,700 346,604 111,000 119,096 Three items comprised the standard variable manufacturing costs Direct materials: Frames. Static budget cost of $35,880. The standard input is 2.00 ounces per unit. Direct materials: Lenses. Static budget costs of $96,720. The standard input is 4.00 ounces per unit. Direct manufacturing labor: Static budget costs of S 140,400. The standard input is 1.00 hour per unit . . The actual variable manufacturing costs were as follows: Direct materials: Frames. Actual costs of $70,080. Actual ounces used were 4.00 ounces/unit. Direct materials: Lenses. Actual costs of $131,400. Actual ounces used were 6.00 ounces/unit. Direct manufacturing labor: Actual costs of $145,124. The actual labor rate was $14.20/hour. Compute price, efficiency and volume variances for Direct Labor. 137

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