Using a standard cost accounting system, DockGuard produced 190,000 boat fenders during the year using 1,570,000 feet of extruded vinyl purchased at $1.50 a foot. Production required 4,300 direct labor hours costing $14.50 an hour. The material standard was 88 feet of vinyl per fender at a standard cost of $1.65 per foot. The labor standard was 0.026 direct labor hours per fender and the standard cost was $13.50 per hour.

Requirement 1. Calculate price and quantity differences for direct materials. Calculate rate and productivity variances for direct labor. (Enter the variances as positive numbers. Enter the currency amounts in the nearest cents and your answers in the nearest whole dollar. Label the variances as positive (F) or negative (U). Abbreviations used: DM = Direct materials, DL = direct labor.)

Start directly with the variances of the materials. First, determine the formula for the price variation of the materials directly, then calculate the price variation of the materials directly. (Assume that the amount of material purchased is equal to the amount of material used.)

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		X (		-		)	=	DM price difference
		X (		-		)	=

Determine the formula for the direct material quantity variation, then calculate the quantity variation for the direct materials.

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		X (		-		)	=	DM quantity difference
		X (		-		)	=

Next, calculate the variances for direct labor. First, determine the formula for rate variance, then calculate the rate variance for direct labor.

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		X (		-		)	=	DL ratio difference
		X (		-		)	=

Determine the productivity variance formula for direct labor, then calculate the productivity variance for direct labor.

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		X (		-		)	=	DL efficiency difference
		X (		-		)	=

Requirement 2. Does the variance model show that company managers are trading? To explain.

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