2. Owly Corporations adhesives division makes and sells a reusable high strength and hold tape

called Tape-Raculous. Each roll of Tape-Raculous sells for $10 and is 10 meters long. Tape

Raculous is made from compound PQ. The standard quantity of compound PQ to make a meter

of tape is 100 grams. The standard direct labour time to make a roll of tape is 5 minutes. The

static budget predicted sales of 15,000 rolls of tape for the month of March. Actual sales for

March were 17,520 rolls of tape. Actual direct labour hours for March were 1,410 hours with a

total cost of $30,174. The standard direct labour rate is $21 per hour. The standard price for

compound PQ is $4.75 per kilogram. The actual amount of compound PQ used in March was

18,000 kilograms at a cost of $84,240.

Net operating income for Tape-Raculous for March was $54,250. Owly Corporations required

rate of return is 16%. The Tape-Raculous average net operating assets for March were $310,000.

A. Calculate the direct labour rate and efficiency variances in March. Label if Favourable or

Unfavourable.

B. Calculate the direct materials price and quantity variances in March. Label if Favourable or

Unfavourable.

C. What is the residual income for Tape-Raculous in March?

D. What is the return on investment (ROI) for Tape-Raculous in March?