Reference no: EM131116778

Gerald/Brooke, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as follows.

	Standard Price	Standard Quantity	Standard Cost
Direct materials	$1.6 per yard	1.25 yards	$2
Direct labor	$12 per DLH	0.25 DLH	3
Variable overhead	$4 per DLH	0.25 DLH	1
Fixed overhead	$6 per DLH	0.25 DLH	1.5
			$7.50

Bobby Brickley, operations manager, was reviewing the results for November when he became upset by the unfavorable variances he was seeing. In an attempt to understand what had happened, Bobby asked CFO Lila Davis for more information. She provided the following overhead budgets, along with the actual results for November.

The company purchased and used 116,400 yards of fabric during the month. Fabric purchases during the month were made at $1.45 per yard. The direct labor payroll ran $251,559, with an actual hourly rate of $12.1 per direct labor hour. The annual budgets were based on the production of 1,004,950 shirts, using 256,500 direct labor hours. Though the budget for November was based on 89,700 shirts, the company actually produced 83,160 shirts during the month.

	Variable Overhead Budget
	Annual Budget	Per Shirt	November-Actual
Indirect material	$452,400	$0.45	$38,000
Indirect labor	303,700	0.3	34,460
Equipment repair	202,400	0.2	20,000
Equipment power	52,200	0.05	13,900
Total	$1,010,700	$1.00	$106,360

	Fixed Overhead Budget
	Annual Budget	November-Actual
Supervisory salaries	$264,500	$22,100
Insurance	351,300	31,600
Property taxes	81,300	7,300
Depreciation	320,000	38,000
Utilities	211,200	21,700
Quality inspection	282,000	32,800
Total	$1,510,300	$153,500

(a) Calculate the direct materials price and quantity variances for November. 

(b) Calculate the direct labor rate and efficiency variances for November. 

(c) Calculate the variable overhead spending and efficiency variances for November.

(d) Calculate the fixed overhead spending variance for November.