Materials and Labor Variances At the beginning of the year, Craig Company had the following standard cost sheet for one of its plastic products: Direct materials (5 lbs. @ $4.00) Direct labor (2 hrs. @ $15.00) $20.00 30.00 $50.00 Standard prime cost per unit The actual results for the year are as follows: a. Units produced: 360,000. b. Materials purchased: 2,520,000 pounds @ $5.15. c. Materials used: 2,088,000 pounds. d. Direct labor: 792,000 hours @ $12.72. Required: 1. Compute price and usage variances for materials. Enter amounts as positive numbers and select Favorable or Unfavorable. Material price variance -2,401,200 X Unfavorable Materials and Labor Variances Deporte Company produces single-colored t-shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vats must be cleaned and prepared for the next batch of materials to be colored. The following standards for changeover for a given batch have been established: Direct materials (2.4 lbs. @ $0.95) Direct labor (0.75 hr. @ $7.40) Standard prime cost $2.28 5.55 $7.83 During the year, 79,500 pounds of material were purchased and used for the changeover activity. There were 30,000 batches produced, with the following actual prime costs: Direct materials Direct labor $68,670 $168,287 (for 22,450 hrs.) Required: Compute the materials and labor variances associated with the changeover activity, labeling each variance as favorable or unfavorable. Material Variances Price variance Usage variance 6,916.5 X 7,125 Unfavorable Unfavorable Labor Variances Rate variance 2,020.5 X Favorable X Efficiency variance 370 Favorable