Drogheda Chemical adopts a continuous improvement approach to setting monthly standards’ costs. Assume the direct materials standard quantity input of 10 kg per output unit and the direct manufacturing labour quantity input of 0.5 hours per output unit pertain to January 2018. The standard amounts for February 2018 are 0.997 of the January standard amount. The standard amounts for March 2018 are 0.997 of the February standard amount. Assume the same information for March 2018 as in Exercise 15.18 except for these revised standard amounts. 

Required

1. Calculate the March 2018 standard quantity input amounts per output unit for direct materials and direct manufacturing labour. 

2. Calculate the March 2018 price and efficiency variances of direct materials and direct manufacturing labour.

Data From Exercise 15.18

Drogheda Chemical Ltd has set-up the following standards per finished output unit for direct materials and direct manufacturing labour. 

Direct materials: 10 kg at €3.00 per kg ............................................................................. €30.00 

Direct manufacturing labour: 0.5 hour at €20.00 per hour ........................................ €10.00 

The number of finished output units budgeted for March 2018 was 10,000; 9810 units were actually produced. 

Actual results in March 2018 were: 

Direct materials: 98,073 kg used 

Direct manufacturing labour: 4900 hours ..................................................................... €102,900 

Assume that there were no opening stocks of either direct materials or finished units. During the month, materials purchases amounted to 100,000 kg, at a total cost of €310,000. Price variances are isolated upon purchase. Efficiency variances are isolated at the time of usage.