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Question - All-Star ?Fender, which uses a standard cost? system, manufactured 20,000 boat fenders during 2024?, using 145,000 square feet of extruded vinyl purchased at $1.20 per square foot. Production required 430 direct labor hours that cost $13.50 per hour. The direct materials standard was seven square feet of vinyl per? fender, at a standard cost of $1.25 per square foot. The labor standard was 0.026 direct labor hour per? fender, at a standard cost of $12.50 per hour.
Compute the cost and efficiency variances for direct materials and direct labor. Does the pattern of variances suggest All-Star ?Fender's managers have been making? trade-offs? Explain.
Begin with the cost variances. Select the required? formulas, compute the cost variances for direct materials and direct? labor, and identify whether each variance is favorable? (F) or unfavorable? (U). ?(Abbreviations used: AC? = actual? cost; AQ? = actual? quantity; FOH? = fixed? overhead; SC? = standard? cost; SQ? = standard? quantity.)
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