Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger

Exercise 30

Materials and Labor Variances
At the beginning of the year, Shults Company had the following standard cost sheet for one of its plastic products:
The actual results for the year are as follows:
a. Units produced: 350,000.
b. Materials purchased: 1,860,000 pounds @ $5.10.
c. Materials used: 1,850,000 pounds.
d. Direct labor: 725,000 hours @ $11.85.
Required:
1. Compute price and usage variances for materials.
2. Compute the labor rate and labor efficiency variances.