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b. Fabulous Quality uses a standard cost system. It has established the following standards for one unit of product. Direct labour Standard quantity 1.4 hours
b. Fabulous Quality uses a standard cost system. It has established the following standards for one unit of product. Direct labour Standard quantity 1.4 hours Direct materials 5 Kg Standard price or rate $12.00 per hour $3.60 per kg Standard cost $16.80 $18.00 In April, the company purchased 125,000 Kg of direct material at a total cost of $490,000. The total factory wages for April were $364,000, 95 percent of which were for direct labour. The company manufactured 22,000 units of product during April using 106,000 Kg of direct material and 28,000 direct labour-hours. Required: Determine the followings: Material price variance, material quantity variance, labour rate variance, and labour efficiency variance. Also, mention ONE possible cause of each variance identified. Type in answers to Question 3. b. (expand the space as needed) (12 marks)
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