The following information describes production activities of Mercer Manufacturing for the year:

Exercise 23-16 Direct materials and direct labor variances LO P2

The following information describes production activities of Mercer Manufacturing for the year:

Actual raw materials used	18,000 lbs. at $4.15 per lb.
Actual factory payroll	5,555 hours for a total of $106,656
Actual units produced	30,060

  

Budgeted standards for each unit produced are 0.50 pounds of raw material at $4.10 per pound and 10 minutes of direct labor at $20.20 per hour.

(1)

Compute the direct materials price and quantity variances. (Round your answers to 2 decimal places.) Explanation: (1) Standard quantity 30,060 units × 1/2 pound per unit = 15,030 pounds   (2) Standard hours 30,060 units × 1/6 hour per unit = 5,010 hours Actual rate per hour = $106,656/5,555 hours = $19.20