Mersey Company produced 1,000 trash cans during March using 450 direct labor hours and purchased and used 3,100 pounds of rubber. Its materials and labor standards are:
Direct Materials (3 pounds of rubber $.50)........$1.50
Direct Labor (.5 Hours @ $16).................................3
Its materials price variance was a favorable $620 and its labor rate variance was an unfavorable $900.
1. Calculate the actual price per unit.
2. Calculate the actual labor rate.
3. Determine the materials usage variance and whether it is favorable or unfavorable.
4. Determine the labor efficiency variance and whether it is favorable or unfavorable.