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Variances for direct materials and direct labor
Banner Company manufactures flags of various countries. Each flag has a standard of eight square feet of fabric and three hours of direct labor time. Information about recent production activity follows.
Actual cost of fabric: $4.50 per square footFabric consumed: 32,080 square feetStandard price per square foot of fabric: $4.25Standard direct labor rate: $10.00 per hourActual direct labor rate: $10.20 per hourActual labor hours worked: 11,940Actual production completed: 4,000 flags
a. Compute the materials price variance and the materials quantity variance.
b. Compute the labor rate variance and the labor efficiency variance.
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