11.21 Direct labour variances Following is information about Pine Furaiture's direct labour hours and wages last period. Required (a) Calculate the direct labour efficiency variance. (b) Calculate the direct labour price variance. 11.22 Direct material variances The Neon Manufacturing Company is a joint venture between Australian and Chinese firms with an assembly plant located in Beijing. The company's managers expected to produce 20000 units of product in March. The standard cost for the materials used for 20000 units is 173600 yuan, and the standard cost per unit is 2,80 yuan per kilogram. Actual production in March was 19 100 units. The company purchased and used 57300 kilograns of materials costing 163305 yuan. Required (a) What was the standard quantity of kilograms per unit? (b) What was the direct materials efficiency variance for March? (c) What was the direct materials price variance for March? 11.32 Revenue variances Consider the following information for Morgan's Cheese and Butter Division. 3 Additional information: "The budgeted volumes are recognised here as homogeneous units of expression for heterogeneous units of inputs. Additional information: - The selling price represents the average selling price of combined cheese and butter (per kg). Required (a) Calculate the market size and market share variances. (b) Comment on the meaning of your calculations (for example, how these help Cowabunga management evaluate performance). 11.34 Cost variances; variance analysis; employee motivation Raging Sage Coffee is a franchise that sells cups of coffee from a cart in shopping centres. A computerised standard costing system is provided as a part of the franchise package. A portion of the standard cost data follows. In its first month of operation, the Launceston franchise recorded the following data: 4 The entity's policy is to record materials price variances at the time materials are purchased. Required (a) Are direct labour hours for the cart most likely fixed or variable? Explain. (b) Given your answer to part (a), should a direct labour efficiency variance be calculated? Why? (c) Calculate the direct materials price and efficiency variances. (d) How many cups of coffee did the franchise owners expect to sell this period? Compare this estimate to the amount actually sold. (e) Provide possible explanations for the drop in sales. (f) Suppose the clerks/brewers currently receive a bonus based on their ability to control costs as measured using cost variances. Recommend a bonus system that might help the owners contain costs but also increase sales
