DuRoss Company produces coats. The company uses a standard costing system and has set the following standards for materials and labor:
Fabric (8 yards @ $6) .................................... $48
Direct labor (2 hours @ $18) ........................ $36
Total prime cost............................................. $84
During the year DuRoss produced 55,000 coats. Actual fabric purchased was 460,000 yards at $5.75 per yard. There were no beginning or ending inventories of fabric. Actual direct labor was 120,000 hours at $19.25 per hour.
Required:
A. Compute the cost of leather and direct labor that should be incurred for the production of 55,000 coats.
B. Compute the total budget variances for materials and labor.
C. Compute the materials price variance.
D. Compute the materials usage variance.
E. Compute the labor rate variance.
F. Compute the labor efficiency variance.