# 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.)

(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.)

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