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7-42 Direct materials and manufacturing labor variances, solving unknowns. (CPA, adapted) On May 1, 2017, First Call Company began the manufacture of a new
7-42 Direct materials and manufacturing labor variances, solving unknowns. (CPA, adapted) On May 1, 2017, First Call Company began the manufacture of a new product. The company installed a standard-costing system to account for manufacturing costs. The standard costs per unit is: Direct materials (3 kg. at *5 per kg.) Direct manufacturing labor (1/2 hour at *20 per hour) Manufacturing overhead (75 percent of direct manufacturing labor costs) The following data were obtained from the records for the month of May: Particulars 15.00 10.00 7.50 32.50 Debit Credit Revenues 1,25,000 Accounts payable control (for May's purchases of direct materials) 68,250 Direct materials price variance *3,250 Direct materials efficiency variance 2,500 Direct manufacturing labor price variance 1,900 2,000 Direct manufacturing labor efficiency variance Actual production in May was 4,000 units and actual sales in May were 2,500 units.
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