Problem:
Party Balloons Company produces mylar blaaoons. The company's direct materials standards for the deluxe balloon includes 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 200,600 deluxe balloons. Actual production data is.
Direct Materials 602,000 ounces @$0.028 per ounce
Direct Labor 2,000 hours @$18.50 per hour
Required:
Question 1: Compute the direct materials price and quantity variances.
Question 2: Compute the direct labor rate and efficiency variances.
Note: Please provide reasons to support your answer.