Question: Rompola Corporation manufactures futons with the following standard costs per unit:
Direct materials 80 yards @ $2.00 per yard
Direct labor 20 hours @ $20.00 per hour
The actual results for the year were as follows:
Direct materials 120,000 yards purchased at a cost of $264,000; 118,000 yards used
Direct labor 32,000 hours worked at a total cost of $604,800
Production 1,500 units
Compute the following variances:
1. Direct materials price variance
2. Direct materials usage variance
3. Direct materials inventory variance
4. Direct labor price variance
5. Direct labor usage variance