1.

Exercise 21-12 Direct materials and direct labor variances LO P3 Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures.

Direct materials (15 lbs. @ $4 per lb.) $60

Direct labor (2 hrs. @ $14 per hr.) 28

During June the company incurred the following actual costs to produce 8,500 units.

Direct materials (130,500 lbs. @ $3.80 per lb.) $ 495,900

Direct labor (21,900 hrs. @ $14.15 per hr.). 309,885

(1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) (2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)

2.

Exercise 21-11 Direct materials and direct labor variances LO P3

Hutto Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures.

Direct materials (15 lbs. @ $3 per lb.) $45

Direct labor (4 hrs. @ $15 per hr.) 60

During May the company incurred the following actual costs to produce 9,000 units.

Direct materials (138,000 lbs. @ $2.80 per lb.) $ 386,400

Direct labor (40,400 hrs. @ $15.10 per hr.). 610,040

AH = Actual Hours

SH = Standard Hours

AR = Actual Rate

SR = Standard Rate

AQ = Actual Quantity

SQ = Standard Quantity

AP = Actual Price

SP = Standard Price

(1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)

(2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Round "Rate per hour" answers to 2 decimal places.)