Labor and materiai variances Hovell and Schakk Construction Company builds custom designed homes and uses a standard cost system for a number of construction costs. The company carries raw materials inventory at actual cost and recognizes variances when materials are used. The standard for spray painting 1,000 square feet of acoustical ceilings is as follows:

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REQUIRED Labor Materials 12.5 hrs. $11.00 per hr. 24 lbs. $.60 per lb. Actual data on the home currently under construction are as follows: Ceiling area Labor Materials The purchase of materials has already been journalized. a. Compute the labor and material variances. b. Prepare journal entries to record the variances. 38,000 sq. ft. 450 hrs. $5,500 900 lbs. $ 600