Intermediate: Calculation of labour variances and actual material inputs working backwards from variances A company manufactures two components in one of its factories. Material A is one of several materials used in the manufacture of both com¬ ponents.

The standard direct labour hours per unit of production and budgeted production quantities for a 13 week period were:

Required:

(a) Calculate the direct labour variances for the period; (5 marks)

(b) Calculate the standard purchase price for material A for the period and the standard usage of material A per unit of production of component X. (8 marks)

(c) Describe the steps, and information, required to establish the material purchase quantity budget for material A for a period.

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Standard direct labour hours Budgeted production quantities Component X 0.40 hours Component Y 0.56 hours 36000 units 22 000 units The standard wage rate for all direct workers was 5.00 per hour. Throughout the 13-week period 53 direct workers were employed, working a standard 40-hour week. The following actual information for the 13- week period is available: