Grant Electric Inc. manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labour:

Direct materials: 10 kg at $4.50/kg ..................................................... $45.00
Direct manufacturing labour: 0.5 hour at $30 per hour .................... 15.00

The number of finished units budgeted for January 2018 was 10,000; 9,850 units were actually produced.

Actual results in January 2018 were

Direct materials: 98,055 kg used

Direct manufacturing labour: 4,900 hours .............. $154,350

Assume that there was no beginning inventory of either direct materials or finished units. During the month, materials purchases amounted to 100,000 kg, at a total cost of $465,000. Input rate variances are isolated upon purchase. Input-efficiency variances are isolated at the time of usage.

Required

1. Compute the January 2018 rate and efficiency variances of direct materials and dire ct manufacturing labour.

2. Prepare journal entries to record the variances in requirement 1.

3. Comment on the January 2018 rate and efficiency variances of Grant Electric.

4. Why might Grant calculate direct materials rate variances and direct materials efficiency variances with reference to different points in time?