Computing and journalizing standard cost variances Java manfactures coffee mugs that it sells to other companies for customizing with their own logos. Jav prepares flexible budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a coffee mug is based on static budget volume of 60, 200 coffee mugs per month: Direct materials (0.2 lbs @ $0.25 per lb) $0.05 Direct labor (3 minutes @ $0.12 per minute) 0.36 Manufacturing overhead: Variable (3 minutes @ $0.05 per minute) $0.15 Fixed (3 minutes @ $0.14 per minute) 0.42 0.57 Total cost per coffee mug $0.98 Actual cost and production information for July 2012 follow: a. Actual production and sales were 62,900 coffee mugs. b. Actual direct materials usuage was 10,000 lbs., at an actual price of $0.17 per lb. c. Actual direct labor usuage was 202,000 minutes at a total cost of $30, 300. d. Actual overhead cost was $10,000 variable and $30, 500 fixed. e. Marketing and administrative costs were $115, 000.
Requirements.Compute the price and efficiency variances for direct materials and direct labor.