Top Notch Music Inc. produces car stereos. During the year Top Notch Music produced 7,000 stereos. Materials and labor standards for producing these units are as follows:

Direct materials (1 electronic component kit @ $185)$185Direct materials (2 plastic casings @ $45)90Direct labor (8 hours @ $15)120Required:

A.Compute the standards hours allowed for a volume of 7,000 stereos and the planned cost.

Standards hoursPlanned cost$

B.Compute the standard number of kits and casings allowed for a value of 7,000 units and the planned cost for each direct material.

Standard QuantityPlanned CostElectronic kits$Plastic casings$

C.Compute the total budget variances for materials and labor assuming that actual number of electronic kits purchased and used were 7,300 at a price of $179 and actual plastic casings purchased were 14,400 at a price of $43. Actual labor was 57,200 hours at $15.75 per hour.

• VarianceMaterials (electronic component kits)Favorable
• Unfavorable
• Materials (plastic casings)Favorable
• Unfavorable
• LaborFavorable
• Unfavorable