Sonne Company produces a perfume called Whim. The direct materials and direct labor standards for one bottle of Whim are given below:

Sonne Company produces a perfume called Whim. The direct materials and direct labor standards for one bottle of Whim are given below:

	Standard Quantity or Hours		Standard Price   or Rate			Standard Cost
Direct materials	6.50	ounces	$	1.90	per ounce	$	12.35
Direct labor	0.30	hours	$	13.00	per hour	$	3.90

During the most recent month, the following activity was recorded:

a.	20,500 ounces of material were purchased at a cost of $1.70 per ounce.
b.	All of the material was used to produce 3,000 bottles of Whim.
c.	800 hours of direct labor time were recorded at a total labor cost of $12,000.

Required:

1.

Compute the direct materials price and quantity variances for the month. (Input all amounts as positive values. Do not round your per unit rates. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Direct materials price variance	$	F
Direct materials quantity variances	$	U

2.

Compute the direct labor rate and efficiency variances for the month. (Input all amounts as positive values. Do not round your per unit rates, round other intermediate calculations and your final answer to nearest whole dollar. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Direct labor rate variance	$	U
Direct labor efficiency variances	$	F

Explanation:

1.

Standard Quantity Allowed for Actual Output, at Standard Price			Actual Quantity of Input, at Standard Price			Actual Quantity of Input, at Actual Price
(SQ × SP)			(AQ × SP)			(AQ × AP)
19,500 ounces* × $1.90 per ounce			20,500 ounces × $1.90 per ounce			20,500 ounces ×  $1.70 per ounce
= $37,050			= $38,950			= $34,850

	Materials quantity variance = $1,900 U	Materials price variance = $4,100 F
	Spending variance = $2,200 F

*3,000 units × 6.50 ounces per unit = 19,500 ounces

2. 

Standard Hours Allowed for Actual Output, at Standard Rate			Actual Hours of Input, at Standard Rate			Actual Hours of Input, at Actual Rate
(SH × SR)			(AH × SR)			(AH × AR)
900 hours* × $13.00 per hour			800 hours × $13.00 per hour
= $11,700			= $10,400			$12,000

	Labor efficiency variance = $1,300 F	Labor rate variance = $1,600 U
	Spending variance = $300 U

*3,000 units × 0.30 hour per unit = 900 hours