Carol Dee, Inc. designs and manufactures fleece quarter-zip jackets. It sells its jackets to brand-
name outdoor outfitters in lots of one dozen. Carol Dee's May 2020 static budget and actual
results for direct inputs are as follows
Part 1
Requirement 1. Calculate the direct materials and direct manufacturing labor price and efficiency
variances in May 2020. 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 2020. Complete the actual results, price variance, and cost columns, then the efficiency
variance and flexible budget columns. Label each variance as favorable or unfavorable.
Requirements
1.
2020.
flexiblebudget
2.
2020
results. Would you continue the "experiment" of using the new material?
Data table
Static Budget
Number of jacket lots (1 lot = 1 dozen)
300
Per Lot of Jackets:
Direct materials
11 yards at $1.20 per yard = $13.20
Direct manufacturing labor
1.7 hours at $7.80 per hour = $13.26
Actual Results
Number of jacket lots sold
325
Total Direct Inputs:
Direct materials
4,225 yards at $1.40 per yard = $5,915.00
Direct manufacturing labor

488 hours at $7.90 per hour = $3,855.20
More info
Carol Dee
has a policy of analyzing all input variances when they add up to more than 8% of the total cost
of materials and labor in the flexible budget, and this is true in May
2020.
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."
1.Calculate the direct materials and direct manufacturing labor price and efficiency variances in
May
2020.
What is the total
flexiblebudget
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?
2.Comment on the May
2020
results. Would you continue the "experiment" of using the new material?