E9-6 (Algo) Calculating Direct Materials and Direct Labor Variances [LO 9-3, 9-4] Crystal Charm Company makes handcrafted silver charms that attach to jewelry such as a necklace or bracelet. Each charm is adorned with two crystals of various colors. Standard costs follow: Standard Unit Silver Crystals Direct labor $ 26.00 per ounce Standard Quantity 0.55 ounce 8.00 Standard Price (Rate) 1.50 hours $ 0.25 crystal $ 15.00 per hours Cost $ 14.30 2.00 22.50 During the month of January, Crystal Charm made 1,560 charms. The company used 823 ounces of silver (total cost of $22,221) and 12,530 crystals (total cost of $2,881.90), and paid for 2,490 actual direct labor hours (cost of $36,105.00). Required: 1. Calculate Crystal Charm's direct materials variances for silver and crystals for the month of January. 2. Calculate Crystal Charm's direct labor variances for the month of January. ces Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate Crystal Charm's direct materials variances for silver and crystals for the month of January. Note: Round your intermediate calculations and final answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Silver Crystals Direct Material Price Variance Direct Material Quantity Variance Required 1 Required 2 >

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Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance. 

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.