Problem $10-33$ Direct$-$Material and Direct$-$Labor Variances $($ L$010-1,10-3)$

New Jersey Valve Company manufactured $7,800$ units during January of a control valve used by milk processors in its Camden plant.

Records indicated the following:

The control valve has the following standard prime costs:

Required:

Prepare a schedule of standard production costs for January, based on actual production of $7,800$ units.

For the month of January, compute the following variances, indicating whether each is favorable or unfavorable.

a$.$ Direct$-$material price variance.

b$.$ Direct$-$material quantity variance.

c$.$ Direct$-$material purchase price variance.

d$.$ Direct$-$labor rate variance.

e$.$ Direct$-$labor efficiency variance.

Build a spreadsheet: Construct an Excel spreadsheet to solve all of the preceding requirements. Show how the solution will change if the

following information changes: the standard direct$-$labor rate is $$16$ per hour, and the standard direct$-$material price is $$2\mathrm{.}60$ per pound.