Materials and Labor Variances

At the beginning of the year, Shults Company had the following standard cost sheet for one of its plastic products:

Direct materials (6 lbs. @ $5)$30.00Direct labor (2 hrs. @ $12)24.00Standard prime cost per unit$54.00

The actual results for the year are as follows:

1. Units produced: 470,000.
2. Materials purchased: 3,290,000 pounds @ $4.70.
3. Materials used: 2,867,000 pounds.
4. Direct labor: 987,000 hours @ $12.24.

Required:

1.Compute price and usage variances for materials.

Material price variance$_____________Favorable

Material usage variance$__________________Unfavorable

2.Compute the labor rate and labor efficiency variances.

Labor rate variance$__________________Unfavorable

Labor efficiency variance$______________Unfavorable