Question:
At the beginning of July, Commercial Printers Company budgeted 14,000 books to be printed in July at standard direct materials and direct labor costs as follows:
|
Direct materials
|
$28,000
|
|
Direct labor
|
24,500
|
|
Total
|
$52,500
|
The standard materials price is $0.80 per pound. The standard direct labor rate is $14 per hour. At the end of July, the actual direct materials and direct labor costs were as follows:
|
Actual direct materials
|
$31,200
|
|
Actual direct labor
|
28,400
|
|
Total
|
$59,600
|
There were no direct materials price or direct labor rate variances for July. In addition, assume no changes in the direct materials inventory balances in July. Commercial Printers Company actually produced 15,800 units during July.
Determine the direct materials quantity and direct labor time variances.