Question: hi my question is regarding direct material and labour variances...
Hi my question is regarding direct material and labour variances: manufacturer
Durin Jan, company Y produced 1 000 units of a special product called X and the accounting records indicated the following:
|Direct material purchased||36 000kg @ $2.76 per kg.|
|Direct material used||
|Direct labour||4 200hrs @ $36 per hour|
Product X has the following standard prime costs:
|DIrect material: 20 kg @ 2.70 per kg.||$54.00|
|Direct labour hours: 4 hrs @ $34 per hour||136.00|
|Standard prime cost per unit||$190.00|
1. Calculate the total standard direct material costs and direct labour costs for Jan.
2. For the month of Jan, calculate the following variances, indicating whether each is favourable or unfavourable:
a) direct material price variance
b) direct material quantity variance
c) direct labour rate variance
d) direct labour efficiency variance.