Exercise 08-15 Direct materials and direct labor variances LO P3

The following describes production activities of Mercer Manufacturing for the year.

Actual direct materials used	32,000 lbs. at $5.85 per lb.
Actual direct labor used	10,610 hours for a total of $218,566
Actual units produced	63,030

Budgeted standards for each unit produced are 0.50 pound of direct material at $5.80 per pound and 10 minutes of direct labor at $21.60 per hour. 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 and classify each as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Round "Cost per unit" answers to 2 decimal places.) (2) Compute the direct labor rate and efficiency variances and classify each as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)

(1) Compute the direct materials price and quantity variances and classify each as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Round "Cost per unit" answers to 2 decimal places.) (2) Compute the direct labor rate and efficiency variances and classify each as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the direct materials price and quantity variances and classify each as favorable or unfavorable. (Do not round intermediate calculations.) Actual Cost Standard Cost Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the direct labor rate and efficiency variances and classify each as favorable or unfavorable. (Do not round intermediate calculations.) Actual Cost Standard Cost