Reference no: EM132418476

Problem: During June, Fraser Company's material purchases amounted to 6,000 pounds at a price of $7.35 per pound. Actual costs incurred in the production of 2,000 units were as follows:

Direct labor:

$116,935 ($18.20 per hour)

Direct material:

$32,340 ($7.35 per pound)

The standards for one unit of Fraser Company's product are as follows:

Direct labor:

Quantity, 3.1 hours per unit

Rate, $18 per hour

Direct material:

Quantity, 2.1 pounds per unit

Price, $7.10 per pound

Required:

Compute the direct-material price and quantity variances, the direct-material purchase price variance, and the direct-labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.