Standard Costs, Decomposition of Budget Variances, Direct Materials and Direct Labor EZ Tees Corporation produces T-shirts. The company uses a standard costing system and has set the following standards for direct materials and direct labor (for one shirt): $1.28 Fabric (0.8 yds. $1.60) Direct labor (0.1 hr. @ $15) Total prime cost 1.50 $2.78 During the year, EZ Tees produced 124,000 T-shirts. The actual fabric purchased was 99,000 yards at 51.55 per yard. There were no beginning or ending inventories of fabric. Actual direct labor was 12,500 hours at $14.80 per hour. Required: 1. Compute the costs of fabric and direct labor that should have been incurred for the production of 124,000 T-shirts. Direct materials $ 158,720 Direct labor $ 186,000 2. Compute the total budget varlances for direct materials and direct labor. Direct materials 5,270 Favorable Direct labor 1,000 Favorable 3. Break down the total budget variance for direct materials into a price variance and a usage variance. Materials Price Variance 4,950 Favorable Materials Usage Variance 200 Favorable Prepare the journal entries associated with these variances. If an amount box does not require an entry, leave it blank. Price Variance Usage Variance Feedback Check My Work 4. Break down the total budget variance for direct labor into a rate variance and an efficiency variance. Labor Rate Variance 2,500 Favorable het Labor Efficiency Variance 1,500 Unfavorable Feedback Check My Work Prepare the journal entries associated with these variances. If an amount box does not require an entry, leave it blank. Prepare the journal entries associated with these variances. If an amount box does not require an entry, leave it blank