Question

Quality ​Fender, which uses a standard cost​ system, manufactured 20,000 boat fenders during 2018​, using 141,000 square feet of extruded vinyl purchased at $1.10 per square foot. Production required 450 direct labor hours that cost $13.50 per hour. The direct materials standard was seven square feet of vinyl per​ fender, at a standard cost of $1.15 per square foot. The labor standard was 0.026 direct labor hour per​ fender, at a standard cost of $12.50 per hour.

Read the requirement

Begin with the cost variances. Select the required​ formulas, compute the cost variances for direct materials and direct​ labor, and identify whether each variance is favorable​ (F) or unfavorable​ (U). ​(Abbreviations used: AC​ = actual​ cost; AQ​ = actual​ quantity; FOH​ = fixed​ overhead; SC​ = standard​ cost; SQ​ = standard​ quantity.)

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		Formula		Variance
Direct materials cost variance	=		=
Direct labor cost variance	=

Direct materials efficiency variance =

Direct labor efficiency variance  =

Answer 1