Question : The Monroe Corporation sets monthly standard costs
The Monroe Corporation sets monthly standard costs using a continuous-improvement approach. In January 2012, the standard direct material cost is $45 per unit and the standard direct manufacturing labor cost is $15 per unit. Due to more efficient operations, the standard quantities for February 2012 are set at 0.980 of the standard quantities for January. In March 2012, the standard quantities are set at 0.990 of the standard quantities for February 2012. Assume the same information for March 2012 as in Exercise 7-24, except for these revised standard quantities. Required: 1. Compute the March 2012 standard quantities for direct materials and direct manufacturing labor (to three decimal places). 2. Compute the March 2012 price and efficiency variances for direct materials and direct manufacturing labor (round to the nearest dollar).