fruit packaging company makes plastic baskets for food wholesalers 544795

Direct Materials and Direct Labor Variances

P 8. Fruit Packaging Company makes plastic baskets for food wholesalers. Each basket requires 0.8 gram of liquid plastic and 0.6 gram of an additive that includes color and hardening agents. The standard prices are $0.15 per gram of liquid plastic and $0.09 per gram of additive. Two kinds of direct labor—molding and trimming/packing—are required to make the baskets. The direct labor time and rate standards for a batch of 100 baskets are as follows: molding, 1.0 hour per batch at an hourly rate of $12; and trimming/packing, 1.2 hours per batch at $10 per hour.

During the year, the company produced 48,000 baskets. It used 38,600 grams of liquid plastic at a total cost of $5,404 and 28,950 grams of additive at $2,895. Actual direct labor included 480 hours for molding at a total cost of $5,664 and 560 hours for trimming/packing at $5,656.

Required

1. Compute the direct materials price and quantity variances for both the liquid plastic and the additive.

2. Compute the direct labor rate and efficiency variances for the molding and trimming packing processes.