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Problem - Direct Materials and Direct Labor Cost Variances - Menounos Manufacturing Co. uses standard costs. Standard costs and actual costs for direct materials and direct labor for the manufacture of 3,000 units during 20Y6 were as follows:
Standard Costs
Actual Costs
Direct materials
18,000 lbs. at $4.50 per lb.
18,500 lbs. at $4.35 per lb.
Direct labor
7,500 hours at $12.00 per hr.
7,420 hours at $12.30 per hr.
Each unit requires 2.5 hours of direct labor.
Required -
a. Compute the direct materials price variance, direct materials quantity variance, and total direct materials cost variance.
b. Compute the direct labor rate variance, direct labor time variance, and total direct labor cost variance.
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