Exercise 10-33 Materials and Labor Variances

At the beginning of the year, Shults Company had the following standard cost sheet for one of its plastic products:

Direct materials (6 lbs. @ $5)	$30.00
Direct labor (2 hrs. @ $12)	24.00
Standard prime cost per unit	$54.00

The actual results for the year are as follows:

a.Units produced: 340,000.

b.Materials purchased: 1,860,000 pounds @ $5.10.

c.Materials used: 1,850,000 pounds.

d.Direct labor: 700,000 hours @ $11.85.

Required:

1.Compute price and usage variances for materials.

2.Compute the labor rate and labor efficiency variances.