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This continues the Davis Consulting, Inc. situation from Problem P22-56 of Chapter 22. Assume Davus gas created a standard cost card for each job, Standard direct materials include14 software packages a cost of $900 per package. Standard direct labor costs per job include 90 hours at $120 per hour. Davis plans on completing 12 jobs during March 2013. Actual direct materials costs for March included 90 software packages at a total cost of $81,450. Actual direct labor costs included 100 hours per job at an average rate of $125 per hour. Davis completed all 12 jobs in March.
Requirements
1. Calculate direct materials cost and efficiency variances.
2. Calculate direct labor cost and efficiency variances.
3. Prepare journal entries to record the use of both materials and labor for March for the company.
Provide the facts presented, show the various factors that affect reliability of (1) the comparable uncontrolled price method, (2) the resale price technique, (3) the cost plus technique.
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