Problem 1.
Backpack Inc. reported the following actual and budgeted results for 2021.
Actual Budgeted
Backpack production 200,000 180,000
Backpacks sold 150,000 160,000
Selling price $20 $18
Direct materials per backpack 1.5 yards @ $2.00
Direct labor per backpack 0.5 hr. @ $14
Direct materials used in yards 290,000
Direct material costs $580,000
Direct manufacturing hours used 350,000
Direct labor costs $4,550,000
Fixed manufacturing overhead costs $900,000 $825,000
Required:
(a)Calculate the direct materials price and efficiency variances.
(b)Calculate the direct labor price and efficiency variances.
(c)Fixed overhead flexible and production volume variances
(d)Calculate the flexible budget variance for sales revenue
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