Evaluate the direct material price variance

Reference no: EM1341266

The answer to Material and Labor Variances

The Derry-O Company has the following standard cost for their product:

Direct materials 3 yards at $12.50 per yard $37.50 per unit
Direct labor 2 hours at $9 per hour $18.00 per unit

During the prior year, the company produced 4,900 units and 15,000 yards of material were purchased and used in production at $12.40 per yard. The average labor rate was $9.10 and 10,050 hours were worked.

Required:

1. Calculate the direct material price variance.

2. Calculate the direct material usage variance.

3. Calculate the direct labor rate variance.

4. Calculate the direct labor efficiency variance.

Reference no: EM1341266

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