Grandma's Attic Company produces soft pillows made from goose down. The company uses a standard cost system and has set the following standards for materials and labor for each pillow:
Feathers from 5 large white geese (5 geese @ $5)...........25
Fabric to make pillow cases (3 yards @ $2)......................6
Direct labor (5 hours @ $8.25)........................................40
Total prime cost..............................................................$71
During the month, the company produced 1,000 pillows. Actual geese purchased were 5,100, at $4 per goose. Actual fabric purchases 2,900 yards at $2.10 per yard. There was no beginning or ending inventories of geese or fabric. Actual direct labor was 5,400 hours at $7.75 per hour.
Required:
a. Determine the materials price variance for Fabric and whether it is favorable or unfavorable.
b. Determine the materials usage variance for Fabric and whether it is favorable or unfavorable.
c. Determine the labor rate variance and whether it is favorable or unfavorable.
d. Determine the labor efficiency variance and whether it is favorable or unfavorable.