Reed Corp. has set the following standard direct materials and direct labor cost

Question

Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures. Direct materials (4 1bs. s5 per lb. Direct labor (4 hrs. s15.00 per hr.) $70 60 During June the company incurred the following actual costs to produce 8,800 units Direct materials (125,300 lba $4.75 per 1b.) Direct labor (39,100 hrs.$15.15 per hr.. $595,175 592,365 AQ Actual Quantity SQ Standard Quantity AP Actual Price SP = Standard Price AH Actual Hours SH Standard Hours ARActual Rate SR Standard Rate (1) Compute the direct materials price and quantity variances. (2) Compute the direct labor rate variance and the direct labor efficiency variance, Indicate whether each varilance is favorable or unfavorable. Complete this question by entering your answers in the tabs below

Explanation / Answer

(1)

(2)

AQ AP AQ SP SQ SP 125,300 4.75 125,300 5 123,200 (8,800*14) 5 595,175 626,500 616,000 31,325 10,500

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