Hear Smart manufactures headphone cases. During September 2018, the company produced and sold 105,000 cases and recorded the following cost data:

Requirements
1. Compute the cost and efficiency variances for direct materials and direct labor.
2. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances.
3. Hear Smart's management used better quality materials during September. Discuss the trade-off between the two direct material variances?

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Standard Cost Information Quantity Cost $0.15 per part 8.00 per hour 10.00 per hour Direct Materials 2 parts 0.02 hours Variable Manufacturing Overhead 0.02 hours Direct Labor Fixed Manufacturing Overhead ($28,500 for static budget volume 95,000 units and 1,900 hours, or $15 per hour) of Actual Cost Information Direct Materials (209,000 parts @ $0.20 per part) (1,600 hours @ $8.15 per hour) $ 41,800 13,040 Direct Labor Variable Manufacturing Overhead Fixed Manufacturing Overhead 9,000 26,000