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Apotex Toys Lid manufactures only one product, Lenny the Leopard. The company uses a standard cost system and has established the following standards per unit

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Apotex Toys Lid manufactures only one product, Lenny the Leopard. The company uses a standard cost system and has established the following standards per unit of Lenny the Leopard Zardard Duty Standard Price Standard Coast Direct Me 645 20 har RIZER During May, the following activity was recorded by the company The company produced 5,000 units during the month. A total of 40,000kg of material were used, purchased at a cost of E270,000. The company employs 70 persons to work on the production of Lenny the Leopard. During May, each worked an average of 160 hours at an average rate of E13 per hour The company's management wishes to determine the efficiency of the activities related to the product of Lonny the Leopard. Required Compute the following variances for May: a) The materials price and quantity variances (10 Marks) AND b) The labour rate and efficiency variances (10 Marks) Question Three Continued Overleaf PTO Page 4 of 6 BMAN 21040 Question Three Continued Overleaf AND c) In the past, the 70 persons employed in the production of Lenny the Leopard consisted of 40 experienced workers and 30 inexperienced assistants. During May, the company experimented with 46 experienced workers and 24 inexperienced assistants. Would you recommend that the company continue with the new labour mix? (5 Marks AND d) The direct materials were purchased from a new supplier who is eager to enter into a long-term purchase contract. Would you recommend that the company signs the contract

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