Refer to the data in Exercise 10-10. Assume that instead of producing 2,500 bottles of Whim during the month, the company produced only 2,000 bottles using 16,000 ounces of material. (The rest of the material purchased remained in raw materials inventory.)

Required:

Compute the direct materials price and quantity variances for the month.

Data from Exercise 10-10

During the most recent month, the following activity was recorded:
a. Twenty thousand ounces of material were purchased at a cost of $2.40 per ounce.
b. All of the material was used to produce 2,500 bottles of Whim.
c. Nine hundred hours of direct labor time were recorded at a total labor cost of $10,800.

Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials Direct labor $2.50 per ounce 7.2 ounces $18.00 $10.00 per hour 0.4 hours $4.00