FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The direct materials and direct labour standards for one bottle of Clean-All spray cleaner are given below:
Standard Quantity
Standard Price
or Rate
$0.20 per millilitre
$15.00 per hour
Direct materials
Direct labour
During the most recent month, the following activity was recorded:
a. 20,000 millilitres of material was purchased at a cost of $0.25 per millilitre.
b. All of the material was used to produce 3,000 bottles of Clean-All.
c. 625 hours of direct labour time was recorded at a total labour cost of $10,000.
or Hours
6.0 millilitres
0.2 hours
Materials price variance
Materials quantity variance
Required:
1. Compute the direct materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for
favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)
Standard
Cost
$1.20
$3.00
Labour rate variance
Labour efficiency variance
Activate Window:
2. Compute the direct labour rate and efficiency variances for the month. (Indicate the effect of each variance by selecting "F" for
favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)
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Transcribed Image Text:The direct materials and direct labour standards for one bottle of Clean-All spray cleaner are given below: Standard Quantity Standard Price or Rate $0.20 per millilitre $15.00 per hour Direct materials Direct labour During the most recent month, the following activity was recorded: a. 20,000 millilitres of material was purchased at a cost of $0.25 per millilitre. b. All of the material was used to produce 3,000 bottles of Clean-All. c. 625 hours of direct labour time was recorded at a total labour cost of $10,000. or Hours 6.0 millilitres 0.2 hours Materials price variance Materials quantity variance Required: 1. Compute the direct materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Standard Cost $1.20 $3.00 Labour rate variance Labour efficiency variance Activate Window: 2. Compute the direct labour rate and efficiency variances for the month. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Activate Windows
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