Question - The Clayton Company uses a standard cost system. The following standards for direct materials and direct labor was constructed based on budgeted activity level of 20,000 units of production per month:
Standard DM and DL cost per unit of product:
Direct materials, 4 lbs at $3.50 per yard $14
Direct labor, 1.5 DLHs at $8 per DLH $12
The following actual data pertain to month of June activities:
Raw materials cost (70,200 lbs.) $263,250
Direct labor costs (29,250 hours) $228,150
Units produced 18,000 units
How well were the direct material and direct labor costs controlled in the month of June using a report?