Accord Ltd makes curtains. The company operates a standard costing system for the direct costs. The standard cost of a pair of damask curtains comprises the following elements.

Required Calculate the direct material and direct labour variances. Then use the following pro forma statement to reconcile the standard and actual prime costs for the period.

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Direct materials (8 sq metres X 4 per sq metre) Direct labour (6 hours X 8) Prime cost per unit 32 48 80 The company produced 7,500 units during the period and the actual costs incurred are shown below. Direct materials (125,000 sq metres) Direct labour (91,000 hours) Actual prime cost 252,000 313,500 565,500