Sole Purpose Shoe Company

Sole Purpose Shoe Company is owned and operated by SarahCharles. The company manufactures casual shoes, with manufacturingfacilities in your state. Sarah began the business this year, andwhile she has a great deal of experience in manufacturing popularand comfortable shoes, she needs some help in evaluating herresults for the year, and asks for your help.

Direct Materials

Under normal conditions, Sarah spends $8.40 per unit ofmaterials, and it will take 3.60 units of material per pair ofshoes. During July, Sole Purpose Shoe Company incurred actualdirect materials costs of $61,321 for 6,890 units of directmaterials in the production of 2,200 pairs of shoes.

Complete the following table, showing the direct materialsvariance relationships for July for Sole Purpose Shoe Company. Ifrequired, round your answers to two decimal places. When enteringvariances, use a negative number for a favorable cost variance, anda positive number for an unfavorable cost variance.

Actual Cost								Standard Cost
Actual Quantity	X	Actual Price		Actual Quantity	X	Standard Price		Standard Quantity	X	Standard Price
	X	$			X	$			X	$
	= $				= $				= $
			Unfavorable  Direct Materials Price  Variance:				Favorable  Direct Materials Quantity  Variance:
			$				$
					Favorable  Total Direct Materials Cost  Variance:
					$

Direct Labor

Under normal conditions, Sarah pays her employees $8.50 perhour, and it will take 2.80 hours of labor per pair of shoes.During August, Sole Purpose Shoe Company incurred actual directlabor costs of $65,610 for 7,290 hours of direct labor in theproduction of 2,300 pairs of shoes.

Complete the following table, showing the direct labor variancerelationships for August for Sole Purpose Shoe Company. Ifrequired, round your answers to two decimal places. When enteringvariances, use a negative number for a favorable variance, and apositive number for an unfavorable variance.

Actual Cost								Standard Cost
Actual Hours	X	Actual Rate		Actual Hours	X	Standard Rate		Standard Hours	X	Standard Rate
	X	$			X	$			X	$
	= $				= $				= $
			Unfavorable  Direct Labor Rate  Variance:				Unfavorable  Direct Labor Time  Variance:
			$				$
					Unfavorable  Total Direct Labor Cost  Variance:
					$

Budget Performance Report

Sarah has learned a lot from you over the past two months, andhas compiled the following data for Sole Purpose Shoe Company forSeptember using the techniques you taught her. She would like yourhelp in preparing a Budget Performance Report for September. Thecompany produced 3,500 pairs of shoes that required 12,250 units ofmaterial purchased at $8.20 per unit and 9,450 hours of labor at anhourly rate of $8.90 per hour during the month. Actual factoryoverhead during September was $28,350. When entering variances, usea negative number for a favorable cost variance, and a positivenumber for an unfavorable cost variance.

Use the data in the following table to prepare the BudgetPerformance Report for Sole Purpose Shoe Company for September.

Manufacturing Costs	Standard Price	Standard Quantity	Standard Cost Per Unit
Direct materials	$8.40 per unit	3.60 units per pair	$30.24
Direct labor	$8.50 per hour	2.80 hours per pair	23.80
Factory overhead	$2.70 per hour	2.80 hours per pair	7.56
Total standard cost per pair			$61.60

Sole Purpose Shoe Company Budget Performance Report For the Month Ended September 30
Manufacturing Costs	Actual Costs	Standard Cost at Actual Volume	Cost Variance - (Favorable) Unfavorable
Direct materials	$	$	$
Direct labor
Factory overhead
Total manufacturing costs	$	$	$