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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: During the month of January, Crystal Charm made 1,800 charms. The company used 420 ounces of silver (total cost of $9,240) and 3,650 crystals (total cost of $803), and paid for 2,880 actual direct labor hours (cost of $42,480). 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. 3. Identify a possible cause of eachvariance.
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