Score: 0 of 10 pts 1 of 1,0 complete Hw Score: 0%, 0 of 10 pts E7-23 (similar to

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Score: 0 of 10 pts 1 of 1,0 complete Hw Score: 0%, 0 of 10 pts E7-23 (similar to) Question Help BettyDee, Inc. designs and manufactures T-shirts. It sells its T-shirts to brand-name clothes retailers in lots of one dozen. BettyDee's May 2013 static budget and actual results for direct inputs are as follows: (Click the icon to view the data.) BettyDee has a policy of analyzing all input variances when they add up to more than 10% of the total cost of materials and labor in the flexible budget, and this is true in May 2013. The production manager discusses the sources of the variances: "A new type of material was purchased in May. This led to faster cutting and sewing, but the workers used more material than usual as they learned to work with it. For now, the standards are fine. Read the requirements Requirement 1. Calculate the direct materials and direct manufacturing labor price and efficiency variances in May 2013. What is the total flexible-budget variance for both inputs (direct materials and direct manufacturing labor) combined? What percentage is this variance of the total cost of direct materials and direct manufacturing labor in the flexible budget? Begin by calculating the direct materials and direct manufacturing labor price and efficiency variances in May 2013. Complete the actual results, price variance, and cost columns, then the efficiency variance and flexible budget columns. Label each variance as favorable or unfavorable. (Round all answers to the nearest cent.)

Explanation / Answer

1)

2) Reduction in material cost = 2% + 5% = 7% ie. 9058.50*0.07 = 634.1

Reduction in labor cost = 2% ie. 7749*2% = 155

Total variance in combined = 634.1+155= 789.10

Percentage = 789.10 /(9058.5+7749) = 4.7%

3) As per experiment experience, the new material will result in decrease in cost by 4.7%.

DMPV (1.65-1.40)*5490 1372.5 U DMQV (450*11-5490)*1.40 756 U DMLRV (8.20-8.10)*945 94.5 U DMLEV (450*2.2-945)*8.10 364.5 F Total variance 1858.5 (overcost) percentage of total Mat & Lab cost 1858.5/(9058.5+7749) 0.110576 11.06%

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