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Question: hi my question is regarding direct material and labour variances...

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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

19 000kg

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

Required:

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.

 

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