Accounting

Martin Manufacturing manufactures ready-mix cement with the following standard costs:

Direct materials                                2.5 pounds at $2.40 per pound

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Direct labor                                         1.5 hours at $18.00 per hour

Actual results for the month of September were as follows:

Units produced                                                 6,500

Materials purchased (18,000 pounds)                     $36,000

Materials used                                                                  17,500 pounds

Labor used (9,500 hours)                                              $180,500

Required:

A. Calculate the following variances for the month of September:

1. Direct materials price variance

2. Direct materials usage variance

3. Direct materials inventory variance

4. Direct labor price variance

5. Direct labor usage variance

B. Interpret each of the variances calculated.

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