The following information comes from the records of Muncy Company.

Required: Compute the direct materials price and quantity variances, direct labor rate and efficiency variances and state whether the variance is favorable or unfavorable. Hint: Consider calculating the total cost variances first - Total cost variance for DM and total cost variance for DL. Also, recall that the net of the price and quantity variances should equal the total cost variance. Checks: Direct materials price variance is $3,700 unfavorable. Direct labor rate variance is greater than $25,000 but less than $26,000 and favorable.

Actual costs and quantities:

Direct materials used 37,000 feet @ $6.20 per foot

Direct labor hours used 50,660 hours

Direct labor rate per hour $16.50

25,000 units were produced during the period

Standard costs and quantities per unit:

Direct materials 1.5 ft. @ $6.10 per ft.

Direct labor 2 hours @ $17 per hour

Direct Material:

AQ * AP

AQ * SP

Direct materials price variance

AQ *SP

SQ *SP

Direct materials quantity variance

HINT: Standard Quantity (SQ) = 25,000

units * 1.5 ft./unit = 37,500 ft.

Direct Labor:

AH *AR

AH * SR

Direct labor rate variance

AH * SR

SH * SR

Direct labor efficiency variance

Hint: Standard Hours (SH) = 25,000

units * 2 hours/unit = 50,000 hours