Chapter 9 (handwritten problems) Problem 1 Direet Labor and Direct Materials Variances, Journal Entries Delta Company produces single-colored t-shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vat must be cleaned and prepared for the next batch of materials to be colored. The following standards for changeover for a given batch have been established: Direct materials (2.4 lbs. @ $0.95) $2.28 Direct labor (0.75 hrs. @ $7.40) 5.55 Total prime cost $7.83 During the year, 79,500 pounds of material were purchased and used for the changeover activity. There were 30,000 batches produced, with the following actual prime costs: Direct materials Direct labor $ 63.000 $153,000 (for 22,450 hrs.) Required: 1. Calculate the direct materials price and usage variances. 2. Calculate the direct labor rate and efficiency variances. 3. Prepare the journal entries for the (a) direct materials price variance, (b) direct materials usage variance, (c) direct labor rate variances. 4. Describe how flexible budgeting variances relate to the direct materials and direct labor variances computed in Requirements 1 and 2. Problem 2 Solving for Unknowns Misterio Company uses a standard costing system. During the past quarter, the following variances were computed: Direct labor efficiency variance Direct labor rate variance 111,600 U 13,950 U Three direct labor hours are allowed per unit produced. (Only one type of product is manufactured.) During the quarter, actual direct labor hours used was 69,750 hours. Misterio used 25 percent more direct labor hours than should have been used. Required: 1. What are the total hours allowed? 2. What is the standard hourly rate for direct labor? What is the actual hourly rate? 3. How many actual units were produced