1. Ceiser Company manufactures a product called H65. The material and labour standards to make

one unit of the finished good H65 are set by the companys managers.

Ceiser Company plans to use 5.5 meters of raw material at a cost of $8 per meter. In order to make

one unit of H65, the manager plans that the labours should take 3.8 hours per units and the manager

plan to pay the labours $12.50 per hour.

In the month of September, a total of 4300 units of the finished goods H65 were manufactured. A

total of 27,000 meters of raw materials were purchased at a cost of $229,500, out of which 22,360

meters of raw materials were used to manufacture the 4300 units finished goods. The direct labours

worked for 15,050 hours to manufacture the finished goods. The labours were paid a total of

$188,125.

Required :

a. Calculate both the material variances and comment on your answers. (10 marks)

b. Calculate both the labour variances and comment on your answers. (8 marks).