​, Inc. produced 1,000 units of the​ company's product in 2024. The standard quantity of direct materials was three yards of cloth per unit at a standard cost of $1.05 per yard. The accounting records...

Inc. produced

units of the​ company's product in

The standard quantity of direct materials was

yards of cloth per unit at a standard cost of

per yard. The accounting records showed that

yards of cloth were used and the company paid

yard. Standard time was

direct labor hours per unit at a standard rate of

per direct labor hour. Employees worked

hours and were paid

per hour.

Read the

Requirement 1. What are the benefits of setting cost​ standards?

Standard costing helps managers do the​ following:

Requirement 2. Calculate the direct materials cost variance and the direct materials efficiency variance as well as the direct labor cost and efficiency variances.

Begin with the cost variances. Select the required​ formulas, compute the cost variances for direct materials and direct​ labor, and identify whether each variance is favorable​ (F) or unfavorable​ (U).​(Abbreviations used: AC​ = actual​ cost; AQ​ = actual​ quantity; FOH​ = fixed​ overhead; SC​ = standard​ cost; SQ​ = standard​ quantity.)

Select the required​ formulas, compute the efficiency variances for direct materials and direct​ labor, and identify whether each variance is favorable​ (F) or unfavorable​ (U).​(Abbreviations used: AC​ = actual​ cost; AQ​ = actual​ quantity; FOH​ = fixed​ overhead; SC​ = standard​ cost; SQ​ = standard​ quantity.)