Gerald/Brooke, Ltd.

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. (If variance is zero, select “Not Applicable” and enter 0 for the amounts.)

Direct material price variance $
Direct material quantity variance $

(b)Calculate the direct labor rate and efficiency variances for November. (Round answers to 0 decimal places, e.g. 125. If variance is zero, select “Not Applicable” and enter 0 for the amounts.)

Direct labor rate variance $
Direct labor efficiency variance $

(c)Calculate the variable overhead spending and efficiency variances for November.(Round answers to 0 decimal places, e.g. 125. If variance is zero, select “Not Applicable” and enter 0 for the amounts.)

Variable overhead spending variance $
Variable overhead efficiency variance $

(d)Calculate the fixed overhead spending variance for November. (Round answer to 0 decimal places, e.g. 125. If variance is zero, select “Not Applicable” and enter 0 for the amounts.)

Fixed overhead spending variance $

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