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When discussing variance analysis in class, we performed a variance analysis of direct labor costs in the Savannah Fashions example. The data for that example
When discussing variance analysis in class, we performed a variance analysis of direct labor costs in the Savannah Fashions example. The data for that example are provided below: Budgeted Amounts Actual Results Total Variance Shirts manufactured 6,000 6,732 Revenue 120,000 127,908 $7,908 F $294 U Direct materials costs Direct materials units (rolls of cloths) $30,000 600 $30,294 612 $693 U Direct manufacturing labor costs Direct manufacturing labor-hours $27,000 1,500 $27,693 1,530 Variable Overhead (varies with dih) $4,500 $4,973 $473 U a. Using the same information, please calculating the activity, quantity/efficiency, and price/rate variances for direct materials b. Based on the variances you calculated in part a, does it appear that the company purchased and used direct materials of inferior quality? Why or why not
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