Question - ABC Company produces the fuzzy bear which is a stuffed animal with 99 percent natural fibers.
Each fuzzy bear requires a standard of four square yards of cotton cloth. The standard price is $1.00 per square yard. ABC manufactured 1,000 fuzzy bears in October. The company purchased 4,100 of cloth and paid $1.05 per square of cloth. The company used 4,020 yards of cloth in the production of 1,000 fuzzy bears.
What is the material price variance and labor rate variance?