Carlton Corporation produces and sells leather handbags. This year, 900 handbags were actually produced and...
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Carlton Corporation produces and sells leather handbags. This year, 900 handbags were actually produced and sold. Each bag has a standard requiring two yards of material at a cost of $4.00 per yard and 1 hour of assembly time at a cost of $9.50 per hour. Actual costs at the production of 900 bags were $7,215 for materials (1,850 yards purchased and used @ $3.90 per yard) and $10,125 for labor (1,125 hours @ $9.00 per hour).
(a) Determine the materials quantity (sometimes called usage) variance and the materials price variance. Also indicate, Favorable or Unfavorable variances.
(b) Determine the labor wage (sometimes called rate) variance and the labor efficiency variance. Also indicate, Favorable or Unfavorable variances.
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