Problem:
Party Balloon Company produces Mylar balloons. The company's direct materials standards for its deluxe balloon include 3 ounces of Mylar. Standard prices for the year were 0.030 per ounce. Direct labor standards for the deluxe balloon specify 0.01 hour of direct labor at a standard direct labor rate of $18 per hour.
- During January, the company made 200,000 deluxe balloons. Actual production data follow:
- Direct materials: 602,000 ounces @ 0.028 per ounce
- Direct labor: 2,000 hours @ $18.50 per hour
- Direct materials price variance: $1,204 (f)
- Direct materials quantity variance: $6 (u)
- Direct labor rate variance: $1,000 (u)
- Direct labor efficiency variance: 108 (f)
Required:
Question 1: Compute the direct materials price and quantity variances.
Question 2: Compute the direct labor rate and efficiency variances.
Note: Please show the work not just the answer.