# namathe industries manufactures children rsquo s footballs with the following standa 642460

(Variances and variance responsibility) Namathe Industries manufactures children’s footballs with the following standard costs per unit:

 Material: one square foot of leather at \$2.00 \$ 2.00 Direct labor: 1.6 hours at \$9.00 14.40 Variable overhead cost 3.00 Fixed overhead cost 3.00 Total cost per unit \$22.40

Per unit overhead cost was calculated from the following annual overhead budget for180,000 footballs.

 Variable Overhead Cost Indirect labor—90,000 hours at \$7.00 \$630,000 Supplies (oil)—180,000 gallons at \$0.50 90,000 Allocated variable service department costs 90,000 \$ 810,000 Total variable overhead cost Fixed Overhead Cost Supervision \$ 81,000 Depreciation 135,000 Other fixed costs 45,000 Total fixed overhead cost 261,000 Total budgeted overhead cost at 180,000 units \$1,071,000

Following are the charges to the manufacturing department for November when 15,000 units were produced:

 Material (15,900 square feet at \$2.00) \$ 31,800 Direct labor (24,600 hours at \$9.10) 223,860 Indirect labor (7,200 hours at \$7.10) 51,120 Supplies (oil) (18,000 gallons at \$0.55) 9,900 Allocated service department variable OH costs 9,600 Supervision 7,425 Depreciation 11,250 Other fixed costs 3,750 Total \$348,705

Purchasing normally buys about the same quantity as is used in production during a month. In November, the company purchased 15,600 square feet of material at a price of \$2.10 per foot.

a. Calculate the following variances from standard costs for the data given:

1. Material purchase price

2. Material quantity

3. Direct labor rate

4. Direct labor efficiency