ards and calculating materials ompany's product in 2016. Thes ives 2, 3 t at a standard cost of Prepare Sten most to the year's favorable il E8-18 Defining the benefits of setting cost standards and and labor variances Bargain, Inc. produced 1,000 units of the company's produ quantity of direct materials was three yards of cloth per uni $1.00 per yard. The accounting records showed that 2,90 and the company paid $1.05 per yard. Standard time was tu ar. $100F of cloth were used rect labor hours per er direct labor hour. Employees worked 1,800 h unit at a standard rate of $9.75 per direct labor hour. Employee and were paid $9.25 per hour. Requirements 1. What are the benefits of setting cost standards? 2. Calculate the direct materials cost variance and the direct materials efficiency var! ance as well as the direct labor cost and efficiency variances