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Problem - Material and Labor Variances
Last year, Vera Corporation budgeted for production and sales 20,000 cloth handbags. Vera produced and sol 19,250 handbags. Each handbag has a standard requiring 4 feet of materials at a budgeted cost of $2.50 per foot and 45 minutes of sewing time at a cost of $0.28 per minute. The handbags sell for $45.00. Actual costs for the production of 18,000 handbags were $201,600 for materials (80,000 feet at $2.52 per foot) and $260,400 for labor (868,000 minutes at $0.30 per minute).
What is the handbag's direct material price variance?
What is the handbag's direct material usage variance?
What is the handbag's direct labor rate variance?
What is the handbag's direct labor efficiency variance?
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