During the current month the production and cost reports reflected the following information: Beginning units in process. ........................... None Units finished. . . ................................... 9,500 Units in process, end of month . ....................... None Direct labor hours worked . ........................... 20,000 Pounds of material purchased . . ....................... 10,000 Pounds of materials used. . ........................... 9,400 Cost of direct labor . . ............................... $178,000 Cost of materials purchased........................... $42,000 On the basis of this information: 1. Prepare a standard cost summary. 2. Calculate the materials (use the materials purchase price variance) and labor cost variances, and indicate whether they are favorable or unfavorable, using the formulas on pages 421– 422 and 424.
