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Business, 22.01.2021 19:30 lorrainelopez
Loden is a local dress shop that makes casual dresses in fun prints. Below is some actual vs. budget information for Loden's dresses for the month of May. Assume no beginning/ending inventories for simplicity. The cost-allocation base for both variable and fixed overhead is direct labor-hours.
Data for the Month of May
Static
ActualBudget
# Dresses made and sold2,6002,400
Selling price per dress$39$40
Yards of fabric per dress2.93
Cost per yard of fabric$3.84$3.66
Time in hours to sew one dress10.9
Cost of direct labor (per hour)$14$15
Variable overhead costs$3,500$3,000
(utilities, sewing machine maintenance, etc.)
Fixed overhead costs$4,900$4,800
(store rent, insurance, etc.)
What is the price variance for direct labor?
a. $2,600 F
b. $2,340 F
c. $2,600 U
d. $2,340 U
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