Sheridan, Ltd.manufacturesshirts,which itsells to customers for embroidering with various slogans and emblems. The standard cost...
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Sheridan, Ltd.manufacturesshirts,which itsells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as follows.
StandardPrice StandardQuantity StandardCost
Direct materials
$3peryard
2.00
yards
$6.00
Direct labor
$14perDLH
0.75
DLH
10.50
Variableoverhead
$3.20perDLH
0.75
DLH
2.40
Fixedoverhead
$3perDLH
0.75
DLH
2.25
$21.15
SandyRobison, operationsmanager, was reviewing theresults forNovemberwhen he becameupsetbytheunfavorablevarianceshewasseeing.Inanattempt to understand whathadhappened,SandyaskedCFOSuzySummersformoreinformation.Sheprovidedthefollowing overhead budgets, alongwiththeactualresults for November.
Thecompany purchased 80,900 yards of fabric and used 92,500 yards of fabric duringthemonth. Fabric purchasesduringthe monthweremadeat$2.80peryard.Thedirectlaborpayrollran
