The Seneca 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 9,700; 9,650 units were actually produced. (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 97,000 lb., at a total cost of $518,950. Input price variances are isolated upon purchase. Input-efficiency variances are isolated at the time of usage. Read the requirements. 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.) Direct materials (purchases) Direct materials (usage) Direct manufacturing labor Actual input X Budgeted price Cost 97,000 X $ 5.20 = $ 504,400 95,000 4,700 X $ 5.20 = $ 494,000 X $ 29.00 = $ 136,300 Next determine the formula and calculate the costs for the flexible budget. Direct materials Direct manufacturing labor Budgeted input for actual output x Budgeted price = Flexible budget cost 97000 $ 5.20 = 14.5 = ... Standards Direct materials: 10 lb. at $5.20 per lb. Direct manufacturing labor: 0.5 hour at $29 per hour $ 52.00 14.50 Actual Data Actual results in January 2017 were as follows: Direct materials: 95,000 lb. used Direct manufacturing labor: 4,700 hours $ 142,175 Requirements 1. 3. 4. Compute the January 2017 price and efficiency variances of direct materials and direct manufacturing labor. Prepare journal entries to record the variances in requirement 1. Comment on the January 2017 price and efficiency variances of Seneca Corporation. Why might Seneca calculate direct materials price variances and direct materials efficiency variances with reference to different points in time