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Hutto Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures. Direct materials (15 lbs. @
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.) Direct labor (3 hrs. @ $15 per hr.) $60 45 During May the company incurred the following actual costs to produce 9,000 units. Direct materials (138,000 lbs. @ $3.75 per lb.) Direct labor (31,000 hrs. @ $15.10 per hr.). $517,500 468, 100 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. (2) Compute the direct labor rate variance and the direct labor efficiency variance. Standard Cost x I AH SH SR Actual Cost AH * 31,000 * $ 468,100 AR $15.10 X X SR $ 15.00 $ 0 $ 0 $ Direct labor rate variance Direct labor efficiency variance Unfavorable OfUnfavorable Unfavorable Total direct labor variance
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