Standard Costing

Elphy company produces plastic toys. The unit for costing purposes is a case of 36 toys. The following standards for producing 1 case of toys have been established:

Direct materials (10 pounds @ $ 1,8)$ 18

Direct labor (3 hours @ $ 10)$ 30

During November, 150.000 pounds of materials were purchased and used in production. There were 10.000 cases produced, with the following actual cost:

Direct materials$ 225.000

Direct labor$ 350.000 (for 25.000 hours)

Required:

1.Compute the material variance: Material Price Variance and Material Usage Variance, labeling each variance as favorable or unfavorable!

2.Compute the labor variance: Labor Rate Variance and Labor Efficiency Variance, labeling each variance as favorable or unfavorable!