Financial and Managerial Accounting: P20-47 Claro Company produces plastic bottles

Cornerstone of Financial and Managerial Accounting 
P20-47 Standard Costing 
Claro Company produces plastic bottles. The unit for costing purposes is a case of 18 bottles. The following standards for producing one case of bottles have been established:  
Direct materials (5lbs @ $0.90) 4.50 
Direct labor (1.5 hours @ $14.00) 21.00 
Standard Prime Cost 25.50 
During December, 78,000 pounds of material were purchased and used in production. There were 15,000 cases produced, with the following actual prime costs:  
Direct materials 74,000 
Direct labor 315,000 (for 22,500 hours) 

Required:  
1. Compute the materials variances.  
2. Compute the labor variances.  
3. What are the advantages and disadvantages that can result from the use of a standard costing system?  
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