Exercise 14-26 (Algo) Direct Materials and Direct Labor Variances (LO 14-3] Assume that Schmidt Machinery Company had the standard costs reflected in Exhibit 14.5. In a given month, the company used 3,525 pounds of aluminum to manufacture 945 units. The company paid $28.90 per pound during the month to purchase aluminum. At the beginning of the month, the company had 65 pounds of aluminum on hand. At the end of the month, the company had only 40 pounds of aluminum in its warehouse. Schmidt used 5,300 direct labor hours during the month, at an average cost of $41.90 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.) 1. Purchase-price variance 2. Usage variance 3. Direct labor rate variance 4. Efficiency variance Standard Cost Sheet, Product XV-1 SCHMIDT MACHINERY COMPANY Standard Cost Sheet Subtotal Total $ 100 40 Product: XV-1 Descriptions Quantity Cost Rate Direct materials: Aluminum 4 pounds $ 25 per pound PVC 1 pound 40 per pound Direct labor 5 hours 40 per hour Variable factory overhead 5 hours 12 per hour Total variable manufacturing cost Fixed factory overhead* 5 hours 24 per hour Standard manufacturing cost per unit Standard variable selling and administrative cost per unit 200 60 $ 400 120 120 $ 520 $ 50 *Budgeted fixed factory overhead cost = $120,000