2024 – Deluxe Linens makes high end sheets which they sell to major retail stores and on their

2024 – Deluxe Linens makes high end sheets which they sell to major retail stores and on their.

Deluxe Linens makes high-end sheets which they sell to major retail stores and on their website. The budgeted costs for materials and direct labor per unit of finished product are $13 and $5, respectively. The production manager was pleased when she reviewed the following data:

                                                            Master Budget        Actual Costs       Variance
Direct materials                                  $104,000                  $96,900             $7,100 F
Direct labor                                           40,000                      37,740                2,260 F

Prepare a report that provides a more detailed explanation of why the master budget was not achieved. Deluxe produced 6,800 units in the period.
Calculate the direct cost usage and price variances for material and labor.
Interpret the direct cost usage and price variances.  Explain each one individually and as a collective.