Material and Labor Variances [LO1, LO2]

Sonne Company produces a perfume called Whim. The direct materials and direct labor standards for one bottle of Whim are given below:

During the most recent month, the following activity was recorded:

a. Twenty thousand ounces of material were purchased at a cost of $2.40 per ounce.

b. All of the material was used to produce 2,500 bottles of Whim.

c. Nine hundred hours of direct labor time were recorded at a total labor cost of $10,800.

Required:
1. Compute the direct materials price and quantity variances for the month.
2. Compute the direct labor rate and efficiency variances for the month.

Transcribed Image Text:

Standard Quantity or Hours Standard Price or Standard Rate Cost Direct materials. Direct labor.... 7.2 ounces $2.50 per ounce $18.00 0.4 hours $10.00 per hour $4.00