# Question: Krystal Fabrics manufactures a specialty monogrammed blanket The following are

Krystal Fabrics manufactures a specialty monogrammed blanket. The following are the cost standards for this blanket:
Direct materials (fabric)..................... 6.0 yards per blanket at \$ 9.00 per yard Direct labor....................................... 0.5 direct labor hours per blanket at \$ 19.00 per hour

Actual results from last month’s production of 2,500 blankets are as follows:
Actual cost of 15,750 yards of direct material ( fabric) purchased.......................... \$ 127,575 Actual yards of direct material ( fabric) used........................................................... 15,250 Actual wages for 1,370 direct labor hours worked................................................. \$ 25,071

Requirements
1. What is the standard direct material cost for one blanket?
2. What is the actual cost per yard of fabric purchased?
3. Calculate the direct material price and quantity variances.
4. What is the standard direct labor cost for one blanket?
5. What is the actual direct labor cost per hour?
6. Calculate the direct labor rate and efficiency variances.
7. Analyze each variance and speculate as to what may have caused that variance.
8. Look at all four variances together (the big picture). How might they all be related? What variance is very likely to have caused the other variances?

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