Calculate the labor rate and labor efficiency variances
Course:- Managerial Accounting
Reference No.:- EM13939161

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At the beginning of the year, Shults Company had the following standard cost sheet for one of its plastic products:

Direct materials (5 lbs. @ $4.00)


Direct labor (2 hrs. @ $11.25)


Standard prime cost per unit


The actual results for the year are as follows:

a. Units produced: 175,000.

b. Materials purchased: 930,000 pounds @ $4.10.

c. Materials used: 925,000 pounds.

d. Direct labor: 362,500 hours @ $11.15.


1. Compute price and usage variances for materials.

2. Compute the labor rate and labor efficiency variances.

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