Reference no: EM132048366

Problem - McDaniel Company manufactures 100-pound bags of fertilizer that have the following unit standard costs for direct materials and direct labor:

Direct materials (100 lbs. @ $1.00 per lb.) $100.00

Direct labor (0.5 hours at $24 per hour) 12.00

Total standard prime cost per 100 lb. bag $112.00

The following activities were recorded for October:

• 1,000 bags were manufactured.
• 95,000 lbs. of materials costing $76,000 were purchased.
• 102,500 lbs. of materials were used.
• $12,000 was paid for 475 hours of direct labor.

There were no beginning or ending work-in-process inventories.

Required:

1. Compute the direct materials price and usage variances.

2. Compute the direct labor rate and efficiency variances.