Pro Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2018, using...
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Pro Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2018, using 142,000 square feet of extruded vinyl purchased at $1.50 per square foot. Production required 440 direct labor hours that cost $12.00 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.55 per square foot. The labor standard was 0.027 direct labor hour per fender, at a standard cost of $11.00 per hour. Compute the cost and efficiency variances for direct materials and direct labor. Does the pattern of variances suggest Pro Fender's managers have been making trade-offs? Explain.
Pro Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2018, using 142,000 square feet of extruded vinyl purchased at $1.50 per square foot. Production required 440 direct labor hours that cost $12.00 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.55 per square foot. The labor standard was 0.027 direct labor hour per fender, at a standard cost of $11.00 per hour. Compute the cost and efficiency variances for direct materials and direct labor. Does the pattern of variances suggest Pro Fender's managers have been making trade-offs? Explain.
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