Variances

Stylet Inc, designs and manufactures T-shirts. It sells its T-shirts to clothe retailers in lots of one dozen. The Stylets June 2021 static budget and actual results are :

Static budget:

Number of T-shirt lots (1 lot= one dozen) 600

Data for 1 lot:

Selling price = $65

Direct materials: 15 meters at $1.75 per meter = $26.25

Direct labor: 2.5 hours at $8.50 = $21.25

Monthly fixed overhead = $6,000

Actual results:

Number of T-shirt lots sold 650

Data for 1 lot:

Selling price = $65

Direct materials: 9,100 meters at $2 per meter = $18,200

Direct labor: 1,560 hours at $8.60 = $13,416

Monthly fixed overhead = $6,084

Required: Compute the budgeted profit for June and reconcile it with the actual profit with as many variances as the information provided will allow. It is not necessary to detail the variances on fixed overheads.