Answer the following independent questions.

• Iris Sdn Bhd's standard labor cost of producing one unit of product is 2 hours at the rate of RM14.00 per hour. During February, 52,000 hours of labor are incurred at a cost of RM13.80 per hour to produce 25,000 units of product. Journalize the incurrence of the labor costs and the assignment of direct labor to production, assuming a standard cost system is used.

(3 Marks)

• Explain the similarities and differences between standards and budgets. (2 Marks)

• Contrast the accounting for standard and budgets.(2 Marks)

• Minetech Industries computes variances as a basis for evaluating the performance of managers responsible for controlling costs. For several months, the labor quantity variance has been unfavorable. Briefly explain what could be causing the unfavorable labor quantity variance and indicate what type of corrective action, if any, might be taken. (3 Marks)