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variances large enough to investigate? 7-41 Direct materials and manufacturing labor variances, solving unknowns. (CPA, adapted) On May 1, 2017, Bovar Company began the manufacture of a new paging machine known as Dandy. The company in- stalled a standard costing system to account for manufacturing costs. The standard costs for a unit of Dandy follow: Direct materials (3 lb. at $4 per lb.) Direct manufacturing labor (1/2 hour at $20 per hour) Manufacturing overhead (75% of direct manufacturing labor costs) $12.00 10.00 7.50 $29.50 The following data were obtained from Bovar's records for the month of May: Debit Credit $125,000 55,000 Revenues Accounts payable control (for May's purchases of direct materials) Direct materials price variance Direct materials efficiency variance Direct manufacturing labor price variance Direct manufacturing labor efficiency variance $3,500 2,400 1,890 2,200 Actual production in May was 4,000 units of Dandy, and actual sales in May were 2,500 units. The amount shown for direct materials price variance applies to materials purchased during May. There was no beginning inventory of materials on May 1, 2017 1. 2. Compute each of the following items for Bovar for the month of May. Show your computations. Standard direct manufacturing labor-hours allowed for actual output produced Actual direct manufacturing labor-hours worked