Royal Fabrics manufacturers a specialty monogrammed blanket. To follow are the cost and labor standards for this
Question:
Direct material (fabric): 2.5 yards per blanket at $10.00 per yard
Direct labor: 0.5 direct labor hours per blanket at $14.00 per hour
Actual results from last month's production of 2,000 blankets follows:
Actual cost of 4,100 yards of direct material (fabric) purchased: $39,360
Actual yards of direct material (fabric) used: 3,900
Actual wages for 1,100 direct labor hours worked: $10,800
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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Step by Step Answer:
1 DM 25 yards X 10 per yard 25 2 39360 4100 960 per yard 3 Standard price per unit 1000 Actual price per unit 960 Difference 040 Purchased quantity 41...View the full answer
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