Textbook Problem

10-52 Materials and Labor Variances

Refer to the information for Deporte Company above.

Required:

Compute the materials and labor variances associated with the changeover activity, labeling each variance as favorable or unfavorable.

Use the following information for Exercises 10-52 and 10-53:

Deporte Company produces single-colored T-shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vats must be cleaned and prepared for the next batch of materials to be colored. The following standards for changeover for a given batch have been established:

During the year, 79,500 pounds of material were purchased and used for the changeover activity. There were 30,000 batches produced, with the following actual prime costs: