Material and Labour Variances

The direct materials and direct labour standards for one bottle of Whisper perfume, a product of the Farante Company, are given below:

Standard Quantity Standard Price Standard

or Hours or Rate Cost

Direct materials 7.2 grams $2.50 per gram $18.00

Direct labour 0.4 hours $10.00 per hour $4.00

During the most recent month, the following activity was recorded:

a. Twenty thousand grams of material were purchased at a cost of $2.40 per gram.

b. All of the material was used to produce 2,500 bottles of Whisper.

c. Nine hundred hours of direct labour time were recorded at a total labour cost of $10,800.

Required:

1. Compute the direct materials price and quantity variances for the month.

2. Compute the direct labour rate and efficiency variances for the month.