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ADS Luxury Ltd acquires one of the clothing manufacturers above and wants to evaluate their production efficiency with regard to their top selling product- premium
ADS Luxury Ltd acquires one of the clothing manufacturers above and wants to evaluate their production efficiency with regard to their top selling product- premium kaftan beach dresses The budgeted production was 4,300 dresses with the following standard costs for material and labour per dress: Standard Cost Standard Usage per dress Direct Material $2.35 per kg 0.8 kg Direct Labour $9.50 per hour 1.85 hours Actual operating results for the year were as follows: Inventory: Beginning inventory at the start of the year 3,500 units Closing inventory at the end of the year 4.400 units Inventory sold during the year 4.200 units 1.900 kg 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 1600 kg 3.900 kg at an actual cost of $8.580 Direct Labour Actual Hours worked Actual Cost 9,550 hours $88,815 ermulas Material Price Variance = Actual Quantity Purchased" (Actual Price - Standard Price) Material Usage Variance = Standard Price* (Actual Quantityused - Standard Quantityused) Labour Rate Variance - Actual Hours (Actual Price - Standard Price) Labour Efficiency Variance Standard Price. (Actual Hours - Standard Hours) REQUIRED A) MATERIAL PRICE VARIANCE B) MATERIAL USAGE VARIANCE C) LABOUR RATE VARIANCE D) LABOUR EFFICIENCY VARIANCE
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