Standard Costs, Decomposition of Budget Variances, DirectMaterials and Direct Labor
Haversham Corporation produces dress shirts. The company uses astandard costing system and has set the following standards fordirect materials and direct labor (for one shirt):
| Fabric (1.5 yds. @ $2.80) | $4.20 |
| Direct labor (1.1 hr. @ $20) | 22.00 |
| Total prime cost | $26.20 |
During the year, Haversham produced 9,900 shirts. The actualfabric purchased was 14,750 yards at $2.74 per yard. There were nobeginning or ending inventories of fabric. Actual direct labor was11,010 hours at $19.50 per hour.
Required:
1. Compute the costs of fabric and direct laborthat should have been incurred for the production of 9,900shirts.
| Direct materials | $fill in the blank 0e3850fbb03b03f_1 |
| Direct labor | $fill in the blank 0e3850fbb03b03f_2 |
2. Compute the total budget variances fordirect materials and direct labor.
| Direct materials | $fill in the blank 0e3850fbb03b03f_3 | |
| Direct labor | fill in the blank 0e3850fbb03b03f_5 | |
3. Break down the total budget variance fordirect materials into a price variance and a usage variance.
| Materials Price Variance | $fill in the blank 0e3850fbb03b03f_7 | |
| Materials Usage Variance | $fill in the blank 0e3850fbb03b03f_9 | |
Prepare the journal entries associated with these variances. Ifan amount box does not require an entry, leave it blank or enter"0".
| Price Variance | | fill in the blank 521dbb03efc2fe6_2 | fill in the blank 521dbb03efc2fe6_3 |
| | fill in the blank 521dbb03efc2fe6_5 | fill in the blank 521dbb03efc2fe6_6 |
| | fill in the blank 521dbb03efc2fe6_8 | fill in the blank 521dbb03efc2fe6_9 |
| Usage Variance | | fill in the blank 521dbb03efc2fe6_11 | fill in the blank 521dbb03efc2fe6_12 |
| | fill in the blank 521dbb03efc2fe6_14 | fill in the blank 521dbb03efc2fe6_15 |
| | fill in the blank 521dbb03efc2fe6_17 | fill in the blank 521dbb03efc2fe6_18 |
4. Break down the total budget variance fordirect labor into a rate variance and an efficiency variance.
| Labor Rate Variance | $fill in the blank 65c423fcffa2f7f_1 | |
| Labor Efficiency Variance | $fill in the blank 65c423fcffa2f7f_3 | |
Prepare the journal entries associated with these variances. Ifan amount box does not require an entry, leave it blank or enter"0".
| | fill in the blank ea46ee0cb02afba_2 | fill in the blank ea46ee0cb02afba_3 |
| | fill in the blank ea46ee0cb02afba_5 | fill in the blank ea46ee0cb02afba_6 |
| | fill in the blank ea46ee0cb02afba_8 | fill in the blank ea46ee0cb02afba_9 |
| | fill in the blank ea46ee0cb02afba_11 | fill in the blank ea46ee0cb02afba_12 |
