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Materials and Labor Variances Deporte Company produces single-colored t-shirts. Materials for the shirts are dyed...

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Accounting

Materials and Labor Variances

Deporte Company produces single-colored t-shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vats must be cleaned and prepared for the next batch of materials to be colored. The following standards for changeover for a given batch have been established:

Direct materials (2.4 lbs. @ $0.95) $2.28
Direct labor (0.75 hr. @ $7.40) 5.55
Standard prime cost $7.83

During the year, 79,500 pounds of material were purchased and used for the changeover activity. There were 30,000 batches produced, with the following actual prime costs:

Direct materials $72,450
Direct labor $186,259 (for 22,450 hrs.)

Required:

Compute the materials and labor variances associated with the changeover activity, labeling each variance as favorable or unfavorable.

Material Variances
Price variance $fill in the blank 1 Favorable
Usage variance $fill in the blank 3 Unfavorable
Labor Variances
Rate variance $fill in the blank 5 Unfavorable
Efficiency variance $fill in the blank 7 Favorable

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