Accounting

Capmade manufactures baseball caps.  The Accounting Faculty orders 150 caps for the students with HELLO imprinted on them.  Capmade has the following set of standards for the manufacture of baseball caps.

DM:     ½ yard of fabric per cap

            $4.00 per yard of fabric

DL:      1 labor hour per cap

            $11.00 per labor hour

After the caps were shipped, MadHatter analyzed the actual data from production and discovered the following results.

DM:     ¾ yard of fabric per cap

            $2.85 per yard of fabric

DL:      1.4 labor hours per cap

            $9..50 per labor hour

Assignment:

1.    Determine the DM and DL budgets.  

2.    Calculate the Quantity and Price Variances for each budget and indicate whether each is favorable or unfavorable.

3.    Provide explanations for the variances.