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Rowan's Retractable Leashes established a direct labor standard of 0.5 hours per unit at $12 per hour for one of its products. In April, Rowan's produced 16,000 units and used 8,500 direct labor hours. Required: Based on this information, Question (a) Which variance can you calculate?
Question (b) What is the dollar amount of the variance?
Question (c) Is the variance favorable or unfavorable?
Question (d) You also find out the Rowan's purchasing manager bought leash buckles from a new overseas supplier at a price that was much lower than she had paid before. These leash buckles presented great difficulty in the production process. Do you consider the variance to be due to actions of the production manager or the purchasing manager? Why?
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