Plasta Company produces plastic bottles. The unit for costing purposes is a case of 18 bottles. The following standards for producing one case of bottles have been established:

During December, 68,000 pounds of materials were purchased and used in production. There were 16,000 cases produced, with the following actual prime costs:

Required:
1. Compute the materials variances.
2. Compute the labor variances.
3. What are the advantages and disadvantages that can result from the use of a standard costing system?

Transcribed Image Text:

Direct materials (4 lbs. @ $1.10) Direct labor (1.25 hrs. @ $16.00) Standard prime cost $ 4.40 20.00 $24.40