The Livingston Corporation manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labour:

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The number of finished units budgeted for January was $10$ comma $060$; $9$ comma $950$ units were actually produced.

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Assume that there was no beginning inventory of either direct materials or finished units. During the month, materials purchased amounted to $100$ comma $600$ kg$,$ at a total cost of $ $558$ comma $330.$ Input price variances are isolated upon purchase. Input$-$efficiency variances are isolated at the time of usage.

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Part $1$

Requirement $1.$ Compute the January price and efficiency variances of direct materials and direct manufacturing labour.

Let's begin by calculating the actual input at the budgeted price. $($Round your answers to the nearest whole dollar.$)$

Actual input

x

Budgeted price

$=$

Cost

Direct materials $($purchases$)$

x

$=$

Direct materials $($usage$)$

x

$=$

Direct materials: $10$ kg$.$ at $$5\mathrm{.}40$ per kg$.$

$$54\mathrm{.}00$

Direct manufacturing labour: $0\mathrm{.}5$ hour at $$29$ per hour

$14\mathrm{.}50$

Actual results in January were as follows:

Direct materials: $98,500$ kg$.$ used

Direct manufacturing labour: $4,900$ hours

$$150,675$

Compute the January price and efficiency variances of direct materials and direct manufacturing labour.

$2.$

Prepare journal entries to record the variances in requirement $1.$

$3.$

Comment on the January price and efficiency variances of Livingston Corporation.

$4.$

Why might Livingston calculate direct materials price variances and direct materials efficiency variances with reference to different points in time?