Reference no: EM132579464

The Monroe Corporation manufactures lamps. It has set up the following standards as per finished units for direct material and direct labor:

Direct Material: 10lb @ $4.5 per lb = $45

Direct Labor: 0.5 hours @ $30 per hour = $15

The number of finished units budgeted for January 2020 was 10,000 and 9,850 units were actually produced.

Actual results in January 2020 were as follows

Direct Material: 98,055 lb used

Direct Labor: 4900 hours

Assume that there was no beginning inventory of either direct materials or finished units

During the month, material purchased amounting to 100,000lb at a total cost of $465,000. Input price variances are isolated upon purchase. Input efficiency variances isolated at the time of usage.

Question 1: Compute the January 2020 price and efficiency variances of direct material and Direct Labor

Question 2: Prepare Journal entries to record the variances in requirement 1

Question 3: Comment of the January 2020 price and efficiency variances of Monroe Corporation

Question 4: Why might Monroe Corporation calculate direct materials price variances and direct materials efficiency variances with reference to different points in time.