The Starr Company has established a standard cost system for the manufacture of a single...
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The Starr Company has established a standard cost system for the manufacture of a single consumer product, which is branded under the name Vinbit. The standard costs of producing one Vinbit are shown below: Standard Cost Card: Direct Materials: 20 pounds @ $.30 Direct Labor: 3 hours @ $15.00 $6.00 $45.00 At the beginning of the year, Starr Company established a monthly flexible overhead budgetas follows: Flexible Overhead Budget: Variable Charges - $.60 per direct labor hour Fixed Charges - $5,000.00 per month Budgeted Volume -10,000 direct labor hours The costs of operations to produce 4,500 Vinbits during May are stated below (there were no initial inventories): Actual Costs: $34,100 Materials purchased: 110,000 pounds @ $.31 Materials used: 105,000 pounds Direct Labor: 13,750 hours @ $15.20 Variable overhead incurred Fixed overhead incurred $209,000 $8,500 $6,000 Required: 1. Prepare a calculation of the direct material price and quantity variances for the month of May. Variances are calculated as soon as possible. 2. Prepare a calculation of the direct labor wage rate and efficiency variances for the month of May
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