Problem
Set the following standards for July production: Direct Material 3 ounces $4 per ounce Direct labor one hour per Cake $10 per hour During July Kiera's produced 1,000 Cakes Actual Results: 3, 500 ounces purchased at a total cost $15, 750 2, 700 ounces were used in production 1, 100 hours were worked at a total cost of $10, 780. Calculate the direct material and direct labor variances.