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At the beginning of the year, Shults Company had the following standard cost sheet for one of its plastic products:Direct materials (5 lbs. @ $4.00) $20.00Direct labor (2 hrs. @ $11.25) 22.50Standard prime cost per unit $42.50The actual results for the year are as follows:a. Units produced: 175,000.b. Materials purchased: 930,000 pounds @ $4.10.c. Materials used: 925,000 pounds.d. Direct labor: 362,500 hours @ $11.15.
Required:1. Compute price and usage variances for materials.2. Compute the labor rate and labor efficiency variances.
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