Tyler Corp. manufactures a product with the following unit standard costs for material and labor:

Direct materials: 30 square feet x $5 per square foot $150.00

Direct labor: 16 hrs. @ $7.00) 112.00

Actual information for the month of June:

Production 2,500 units

Direct materials purchased 80,000 sq. feet @ $5.30/sq.ft.

Direct materials used 74,000 square feet

Direct labor 42,000 hrs. @ $6.70/hr.

Required:

1. Compute the materials price variance, which the company records at the time of purchase. Be sure to indicate whether the variance is favorable (F) or unfavorable (U).

2. Compute the materials usage variance. Be sure to indicate whether the variance is favorable (F) or unfavorable (U).

3. Provide a possible explanation for the cause of the materials price variance you calculated.

4. Prepare the journal entry to record the purchase of materials.

5. Prepare the journal entry to record the issuance of the materials used in production

6. Compute the direct labor rate variance. Be sure to indicate whether the variance is favorable (F) or unfavorable (U).

7. Compute the direct labor efficiency variance. Be sure to indicate whether the variance is favorable (F) or unfavorable (U).

8. Prepare the journal entry to close the variance accounts for direct labor only (not for direct materials). Assume all variances are immaterial.