1. Mukecha manufacturing company uses two direct cost categories direct materials and direct labor. Standards were developed for each direct cost category and used for exercising control over these costs. The following are standards set by the company on January 1,2015, the first fiscal period of the company:

Direct material use 4kg per unit of output

Direct materials price per kg $60

Direct labor 2 hours per unit of output

Direct labor rate per hour $40

Actual data:

Actual units of output 22,000

Direct materials purchased($62/kg) 90,000kgs

Direct materials used during the year 80,000kgs

Direct labor hours used during the period 40,000hours

Actual direct labor rate per hour $36

Instruction:

1. For direct materials, compute:

1. Price variance
2. Efficiency variance
3. Flexible budget variance

2. For direct labor, compute

1. Rate variance
2. Efficiency variance
3. Flexible budget variance