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Direct Materials and Direct Labor Variances Schmidt Machinery Company (Exhibit 14.5) used 3,375 pounds of aluminum in June to manufacture 900 units. The firm paid $30 per pound during the month to purchase aluminum. On June 1, the company had 50 pounds of aluminum on hand. At the end of June, the firm only had 25 pounds of aluminum in its warehouse. Schmidt spent 4,200 direct labor-hours in June, at an average cost of $42 per hour.
Required: Compute for June, Schmidt Machinery Company's
1. Purchase-price and usage variances for aluminum.
2. Direct labor rate and efficiency variances.
Financial Statement Analysis and Preparation
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