Camisa 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...

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Camisa 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:
Direct materials (2.5 lbs. @ $0.90) $2.25
Direct labor (0.75 hr. @ $ XXXXXXXXXX
Standard prime cost $7.50
During the year, 53,000 pounds of material were purchased and used for the changeover activity. There were 20,000 batches produced, with the following actual prime costs:
Direct materials $42,000
Direct labor 102,000 (for 14,900 hrs.)

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

Answered Same Day Dec 24, 2021

Solution

David answered on Dec 24 2021

109 Votes

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Camisa 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...

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