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Exercise 08-12 Direct materials and direct labor variances LO P3 Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures. Direct materials (16 lbs. $5 per 1b.) Direct labor (hrs. $14 per hr.) 580 During June the company incurred the following actual costs to produce 8.200 units. Direct materials (13),300 bal $4.75 per 10.) Direct labor (28.400 hrs. 514.15 per hr.). 5633, 175 401,860 . AH-Actual Hours SH - Standard Hours AR-Actual Rate SR - Standard Rate AQ - Actual Quantity SQ - Standard Quantity AP - Actual Price SP - Standard Price (1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) (2) Compute the direct labor rote variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the direct materials price and quantity variances. Indicate whether each variance is favorable or unfavorable. Actual Cost Standard Cout Required 2 > Exercise 08-12 Direct materials and direct labor variances LO P3 Reed Corp, has set the following standard direct materials and direct labor costs per unit for the product it manufactures. Direct materials (16 lbh. # $5 per 1b.) Direct labor (3 hrs. $14 per hr.) $80 42 During June the company incurred the following actual costs to produce 8,200 units. Direct materials (133,300 lbe. $4.75 per 1.) Direct labor (28,400 hrs. . $14.15 per hr.). 5633,175 401.860 AH = Actual Hours SH - Standard Hours AR = Actual Rate SR Standard Rate AQ = Actual Quantity SQ - Standard Quantity AP = Actual Price SP = Standard Price (1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable. unfavorable, and no variance.) (2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Complete this question by entering your answers in the tabs below. Required: Required 2 Compute the direct labor rate variance and the direct labor efficiency variance. Indicate whether each variance is favorable or unfavorable. Actual Cost Standard Cost