Chapter 7, Problem 7.26E

1.

To determine

Direct Material Price Variance:

Direct material price variance is the variation in the budgeted per unit cost of raw material and the actual per unit cost multiplied by the number of units purchased.

Direct Material Efficiency Variance:

Direct material efficiency variance is the variation in the budgeted quantities and the actual quantities purchased at a specific price.

Direct Labor Efficiency Variance:

Direct labor efficiency variance is the variation in the actual time consumed in manufacturing unit and the standard time allowed or the budgeted time for the manufacture of a unit multiplied by the standard direct labor rate.

Journal entries of material and manufacturing labor variance.

2.

To determine

Standards:

Standards are the planned level of output for a particular period of time decided at the beginning of that period and are used as a comparison tool with the actual performance.

Advantages of standard costing journal entries over normal costing journal entries.