Claro Company produces plastic bottles The unit for costing purposes
Claro Company produces plastic bottles. The unit for costing purposes is a case of 18 bottles. The following standards for producing one case of bottles have been established:
During December, 78,000 pounds of material were purchased and used in production. There were 15,000 cases produced, with the following actual prime costs:
Direct materials ....... $ 74,000
Direct labor ......... $ 315,000 (for 22,500 hrs.)
Required:
1. Compute the materials variances.
2. Compute the labor variances.
3. What are the advantages and disadvantages that can result from the use of a standard costing system?
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