Rugged life inc designs and manufactures fleece

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7-26. Rugged Life, Inc., designs and manufactures fleece quarter-zip jackets. It sells its jackets to brand-name outdoor outfitters in lots of one dozen. Rugged Life's May 2017 static budget and actual results for direct inputs are as follow: Static Budget: Number of jacket lots (1 lot = 1 doz.) 300 Per Lot of Jackets: Direct Materials 18 yards at $4.65 per yard = $83.70 Direct Manufacturing Labor 2.4 hours at $12.50 per hour = $30.00 Actual Results: Number of Jacket Lots Sold: 325 Total Direct Inputs: Direct Materials 6,500 yards at $4.85 per yards = $31,525 Direct Manufacturing Labor 715 hours at $12.50 = $9,009 Rugged Life has a policy of analyzing all input variances when they add up to more than 8% if the total cost of materials and labor in the flexible budget, and this is true in May 2017. The production manager discusses the sources of the variances: "A new type 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." 1. Calculate the direct materials standard direct manufacturing labor prices and efficiency variances in May 2017. 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 material and direct manufacturing labor in the flexible budget? Actual Results Price Variances Actual Quantity X Budgeted Price Efficiently Variance Flexible Budget Lots 325 325 $3,022.50 Direct Materials $31,525.0 0 $1,300.00 U $30,225.00 0 U $27,202.50 Direct Labor $9,009.00 $71.50 U $8,937.50 $812.50 F $9,750.00 Total Price Variance $1,371.50 U
U

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