Evaluate labor rate variance and labor efficiency variance

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Reference no: EM13182678

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 foot

Fabric consumed:                                           32,080 square feet

Standard price per square foot of fabric:       $4.25

Standard direct labor rate:                            $10.00 per hour

Actual direct labor rate:                                 $10.20 per hour

Actual labor hours worked:                            11,940

Actual 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.

Reference no: EM13182678

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