Assume that Schmidt Machinery Company had the standard costs reflected in Exhibit 14.5. In a given month, the company used 3,850 pounds of aluminum to manufacture 930 units. The company paid $29.50 per pound during the month to purchase aluminum. At the beginning of the month, the company had 60 pounds of aluminum on hand. At the end of the month, the company had only 40 pounds of aluminum in its warehouse. Schmidt used 5,050 direct labor hours during the month, at an average cost of $42.50 per hour.

Required:

Compute the following variances for the month:

1. The purchase price variance for aluminum. Indicate whether this variance is favorable or unfavorable.

2. The usage variance for aluminum. Indicate whether this variance is favorable or unfavorable.

3. The direct labor rate variance. Indicate whether this variance is favorable or unfavorable.

4. The direct labor efficiency variance. Indicate whether this variance is favorable or unfavorable.

(Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)

Standard Cost Sheet, Product XV-1

SCHMIDT MACHINERY COMPANY
Standard Cost Sheet
Product: XV-1
Descriptions	Quantity	Cost Rate	Subtotal	Total
Direct materials:
Aluminum	4	pounds	$ 25	per pound	$ 100
PVC	1	pound	40	per pound	40
Direct labor	5	hours	40	per hour	200
Variable factory overhead	5	hours	12	per hour	60
Total variable manufacturing cost						$ 400
Fixed factory overhead*	5	hours	24	per hour	120	120
Standard manufacturing cost per unit				$ 520
Standard variable selling and administrative cost per unit		$ 50

*Budgeted fixed factory overhead cost = $120,000.