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

Direct materials: 10 lb. at $4.80 per lb.	$48.00
Direct manufacturing labor: 0.5 hour at $29 per hour	14.50

The number of finished units budgeted for January 2014 was 9,880; 9,850 units were actually produced.

Actual results in January 2014 were as follows:

Direct materials: 97,000 lb. used
Direct manufacturing labor: 4,800 hours	$145,20

Assume that there was no beginning inventory of either direct materials or finished units. During the month, materials purchases amounted to 98,800 lb., at a total cost of $484,120. Input price variances are isolated upon purchase. Input-efficiency variances are isolated at the time of usage.

1.

Compute the January 2014 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 2014 price and efficiency variances of Seneca Corporation.

4.

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

	Actual input	x	Budgeted price	=	Cost
Direct materials (purchases)		x		=
Direct materials (usage)		x		=
Direct manufacturing labor		x		=