Reference no: EM132614590

Question - The following items are based on standards for the Dominion Company

Direct materials: standard, 5 pounds per unit at $2 per pound

Direct labour: standard, 1/2 hour at $16 per hour

During the period, the company produced 8,500 units. The following is the actual information for the period:

Direct materials: Dominion purchased and used 46,000 pounds at an actual unit price of $1.85 per pound, for an actual total cost of $85,100.

Direct labour: Dominion used 4,125 hours of labour at an actual hourly rate of $16.80, for a total actual cost of $69,300.

Required -

(a) Compute the price and quantity variances for direct labour and direct material.

(b) Based on the variances calculated in requirement 1, suggest some recommendation to the company manager.