Account Subject Outline Announcements Modules C Assignments Courses Reading List Discussions Carrie Quizzes Marks Inbox My Media Media Gallery History Zoom Help Qwickly Attendance Question 11 8 pts (Time recommended: 17 minutes) MU Ltd has acquired and started manufacturing their products in GSM Ltd. MU Ltd wants to evaluate their production efficiency with regard to one of their top selling products - MU soccer balls Budgeted production was 18,500 units with the following standard costs for inputs per unit Standard Usage per ball Direct Material Direct Labour Standard Cost $2.45 per kg $20.50 per hour 0.7 kg 0.9 hours Actual operating results for the year were as follows: Finished Goods Inventory; Beginning inventory at the start of the year Closing inventory at the end of the year Inventory sold during the year Direct Material: Beginning Raw Material at the start of the year Closing Raw Material at the end of the year Raw Material purchased during the year 17,500 units 16.400 units 1 19,200 units 21.500 kg 21.700 kg 13,200 kg at an actual cost of $33,000 Direct Labour Actual Hours worked Actual Cost 15.750 he auto.proctoru.com is sharing your screen. Stop sharing Hide C n Account G Desblicand Courses Home Subject Outline Announcements Modules Assignments Reading List Discussions Quizzes Required 1. Calculate the two Direct Material variances, clearly classify each as Favourable (F) or Unfavourable (U), and interpret what each variance is indicating about the business (4 marks) Direct Material Price Variance-$ Interpretation Calendar Marks Indice My Media History Media Gallery Zoom Help Qwickly Attendance Direct Material Usage Variance-$ Interpretation 2. Calculate the two Direct Labour variances, clearly classify each as Favourable (F) or Unfavourable (U), and interpret what each variance is indicating about the business (4 marks) Direct Labour Rate Variance - $ Interpretation: T Direct Labour Efficiency Variance $ Interpretation: Note: Please round your responses to 2 decimal places where applicable. Hint: You are able to calculate the number of units produced using the inventory information and the amount of raw materials used using the direct material information. Relevant Formula Material Price Variance (Actual P auto.proctoru.com is sharing your screen. Stop sharing Material Usage Variance (Actual Hide Putline ments ace Email-Anna Tear O Microsoft Office H $2.45 per kg $20.50 per hour 0.7 kg 0.9 hours Direct Labour Actual operating results for the year were as follows: Finished Goods Inventory Beginning inventory at the start of the year Closing inventory at the end of the year Inventory sold during the year Direct Material: Beginning Raw Material at the start of the year Closing Raw Material at the end of the year Raw Material purchased during the year Direct Labour: Actual Hours worked Actual Cost 17,500 units 16,400 units 19,200 units 21.500 kg 21,700 kg 13,200 kg at an actual cost of $33,000 15,750 hours $335,475 Required: 1. Calculate the two Direct Material variances, clearly classify each as Favourable (F) or Unfavourable (U), and interpret what each variance is indicating about the business (4 marks) Direct Material Price Variance-$ Interpretation