James company makes a product that should use 6 pounds of material that should cost $3 per pound according to the cost standards. Each unit requires 2 hours of labor that should cost $18 per hour. James made 1,500 units of the product last month.

When you look at the accounting records for the month, you see that 8,500 pounds of material were purchased at a cost of $27,200 and 3,200 hours of labor were used at a cost of $56,960.

Required: Be sure to label each variance as F favorable or U unfavorable.

1. What is the standard materials costs for a unit of product and what is the standard labor cost to produce a unit of product?

2. What were the total direct materials and direct labor variances?

3. Calculate the following variance breakdowns for last months production:

Materials price variance

Materials usage variance

Labor price (rate) variance

Labor usage (efficiency) variance