Chapter 9 Standard Costing: A Functional-Based Control Approach OBJECTIVE Problem 9.30 Direct Materials, Direct Labor, and Overhead Variances, Journal Entries Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following standard cost sheet: Direct materials (5 lbs. @ $2.60) $13.00 Direct labor (0.75 hr. @ S18.00) 13.50 Fixed overhead (0.75 hr. @ $4.00) 3.00 Variable overhead (0.75 hr. @ $3.00) 2.25 Standard cost per unit $31.75 33 Algers computes its overhead rates using practical volume, which is 54,000 units. The actual results for the year are as follows: a Units produced: 53,000 b. Direct materials purchased: 274,000 pounds at $2.50 per pound c. Direct materials used: 270,300 pounds d. Direct labor: 40.100 hours at $17.95 per hour e. Fixed overhead: S161,700 f. Variable overhead: S122,000 duo usage Required: 1. Compute price and usage variances for direct materials. 2. Compute the direct labor rate and labor efficiency variances. 3. Compute the fixed overhead spending and volume variances. Interpret the volume variance. 1 1 time and efficiency variances. Sciency