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Yoksa Mezun muyum Corporation manufactures lamps

Accounting

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Yoksa Mezun muyum Corporation manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labor.

Direct Materials       : 10 gr. at $4.50 per gr.              $ 45.00

Direct Labor            : 0.5 hour at $30 per hour          $ 15.00

The number of finished units budgeted for January 2019 was 10,000; 9,850 units were actually produced. Actual results in January 2019 were:

Direct Materials       : 98,055 gr. used

Direct Labor            : 4,900 hours                       $ 154,350

Assume that there was no beginning inventory of either direct materials or finished units. During the month, materials purchases amounted to 100 kg. at a total cost of $465,000.

1. Compute the January 2019 price and efficiency variances of direct materials and direct labor (20 pts)
2. Comment on the January 2019 price and efficiency variances. (10 pts)