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) 

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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