Controller Mindy Bricher is analyzing the direct material and direct labor variances for 2008. He…

Controller Mindy Bricher is analyzing the direct material and direct labor variances for 2008. He asks you to prepare a memo outlining what to investigate and why. The following information comes from the accounting records: Direct Material Cost (for 600,000 pounds of material) ………………..$180,000 Units used …………………………………………………………………….550,000 pounds Direct Labor Costs (for 270,000 hours) ………………………………….$3,780,000 Units Produced …………………………………………………………………….1,000,000 The Standard prime cost for one bar is: Direct Materials 0.5 pounds at $0.25 per pound …………………………..$0.125 Direct Labor 0.25 hours at $15 (per hour) …………………………………..$3.750 Total Standard prime cost per bar ………………………………………………$3.875   1.  Compute the appropriate direct material and direct labor variances 2. Prepare a memo outlining what items should be investigated and why.