The Madison Corporation manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labor. (Click the icon to view the standards.) The number of finished units budgeted for January 2017 was 9,860; 9,750 units were actually produced. 2 (Click the icon to view actual data.) Assume that there was no beginning inventory of either direct materials or finished units. During the month, materials purchased amounted to 98,600 lb., at a total cost of $527,510. Input price variances are isolated upon purchase. Input-efficiency variances are isolated at the time of usage Read the requirements. x Requirement 1. Compute the January 2017 price and efficiency variances of direct materials and direct manufacturing labor. Let's begin by calculating the actual input at the budgeted price. (Round your answers to the nearest whole dollar.) Actual input Budgeted price Cost Direct materials (purchases) 98,600 S 5.20 $ 512,720 Direct materials (usage) 96,500 S 5.20 $ 501,800 Direct manufacturing labor 4.800 x $ 32.00 = $ 153,600 X = Next determine the formula and calculate the costs for the flexible budget. Actual input Actual price Flexible budget cost = Direct materials Direct manufacturing labor = $ 52.00 Direct materials: 10 lb. at $5.20 per Ib. Direct manufacturing labor: 0.5 hour at $32 per hour 16.00 Print Done Actual results in January 2017 were as follows: Direct materials: 96,500 lb. used Direct manufacturing labor: 4,800 hours $ 162,000 1. Compute the January 2017 price and efficiency variances of direct materials and direct manufacturing labor. 2. Prepare journal entries to record the variances in requirement 1. 3. Comment on the January 2017 price and efficiency variances of Madison Corporation 4. Why might Madison calculate direct materials price variances and direct materials efficiency variances with reference to different points in time