Question
XYZ Company manufactures 100-pound bags of fertilizer that have the following unit standard costs for direct materials and direct labor: Direct materials (100 lbs. @
XYZ Company manufactures 100-pound bags of fertilizer that have the following unit standard costs for direct materials and direct labor:
Direct materials (100 lbs. @ $2.00 per lb.) | $200.00 |
Direct labor (1.0 hours at $25 per hour) | 25.00 |
Total standard prime cost per 100 lb. bag | $225.00 |
The following activities were recorded for October:
1,500 bags were manufactured. | |
148,500 lbs. of materials were used. | |
$38,000 was paid for 1600 hours of direct labor. |
There were no beginning or ending work-in-process inventories.
Required
A. | Compute the direct materials variances. |
B. | Compute the direct labor variances. |
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