The following standard costs per unit, of one product, have been taken from the records of Bahrain Company
Direct materials 5 kg at 53 per kg
Direct labor 2.5 hours at $10 per hour
Actual data for last month :
Units produced: 12,000
Direct materials used: 35,000 kgs
Direct labor hours: 22,000
Direct labor rate per hour $9
Direct material price: $4 per kg
Direct materials purchased: 100,000 kgs
Required:
(a) Compute the price and efficiency variances for direct materials and direct labor. Direct material price variance to be calculated at the time of purchase
(b) Prepare the joumal entries to record the price and efficiency variances for direct materials and direct labor.
