Botella 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:

Direct materials (4lbs @ $0.95) $3.80 Direct Labor (1.25 hours @ $15.00) $18.75 Standard prime cost $22.55 During December, 78,000 pounds of material were purchased and used in production. There were 15,000 cases produced, with the following actual prime costs: Direct materials $74,000 Direct Labor $315,000 (for 22,500 hrs.) 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?