Exercise 8-11 Direct materials and direct labor variances LO P2

Hutto Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures.

Direct materials (15 lbs. @ $4 per lb.)			$60
Direct labor (3 hrs. @ $15 per hr.)			45

During May the company incurred the following actual costs to produce 9,000 units.

Direct materials (138,000 lbs. @ $3.75 per lb.)		$	517,500
Direct labor (31,000 hrs. @ $15.10 per hr.).			468,100

(1)	Compute the direct materials price and quantity variances.

Actual Cost Standard Cost