Rural Support Ltd has been successful in gaining a major contract to prepare and deliver meals to elderly and disabled people who reside in Windsor. These operations were previously managed by the Windsor Council, and the services were outsourced by the council as a cost-saving measure. Rural Support tendered a low price, so it is very focused on cost control. The following standard prices have been established for some major food ingredients:

_____________________________________________Standard price_

Lamb roast .................................................. $16 per kilogram

Fish fillets.. ................................................. $24 per kilogram

Chips ......................................................... $12 per kilogram

Mixed vegies ................................................ $10 per kilogram

Rural Support purchases the prepared food frozen in 10 kilogram containers, and kitchen staff produce a range of standard meals. Two popular meals are the lamb dinner and the fish dinner. The standard quantities used in these two meals are as follows:

During March, the company produced 500 lamb dinners and 800 fish dinners. Purchase and usage data for the major material ingredients during March follow:

Required:
1. Calculate the total direct material quantity variance and price variances for March.
2. Prepare journal entries to record the purchase of material, use of material and incurrence of variance in March?

Transcribed Image Text:

Fish dinner Lamb dinner 200 grams 250 grams 150 grams 350 grams Fish fillets Lamb roast 300 grams Chips Mixed veggies Chips Purchases in March Used in production Qty (kg) S per kg (kg) 105 Lamb roast 16.80 25.20 250 Fish fillets 170 300 Chips 10.00 320 300 Mixed veggies 200 10.80 120