( Answers with explanation )

Question 1

Which of the options below are true for throughput accounting?

1. Labour and material costs are not included in total factory costs
2. Products that are within the same factory could be ranked based on their return per hour as the cost per hour
3. Both above
4. None of the above

Question 2

The standard direct material cost per unit for a product is calculated as follows: 10.5 litres at $2.50 per litre. No inventory of material is held. Last month the actual price paid for 12,000 litres of material used was 4% above standard and the direct material usage variance was $1,815 favourable.

What was the adverse direct material price variance for last month?

a.	$1,000
b.	$1,260
c.	$1,212
d.	$1,200