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Case 12-67 The Kohler Chemical Manufacturing Company produces two primary chemical products to be used as base ingredients for a variety of products. The 2016

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Case 12-67 The Kohler Chemical Manufacturing Company produces two primary chemical products to be used as base ingredients for a variety of products. The 2016 budget for the two products (in thousands) was as follows: Level of production in litres 1,800 1,800 3,600 Direct materials $4,500 $5,625 $10,125 Direct labour 2,700 2,700 5,400 Total direct manufacturing cost $7,200 $8,325 $15,525 The following planning assumptions were used for the budget: (1) a direct materials yield of 96%, and (2) a direct labour rate of $6 per hour. The actual results for 2016 were as follows (in thousands): Total litres produced 1,710 1,974 3,684 Direct materials $4,104.00 $6,415.50 $10,519.50 Direct labour 2,808.00 3,276.00 6,084.00 Total direct manufacturing cost $6,912.00 $9,691.50 $16,603.50 The actual production yield was 95% for LX-4 and 94% for ABC-8. The direct labour cost per hour for both products was $6.50. Calculate for product LX-4: (1) the direct materials price variance, and (2) the direct materials efciency (yield) variance. (Round answers to the nearest whole dollar, e.g. 5,275.) (1) The direct materials price variance $ :J A v (2) The direct materials efciency (yield) variance $ Calculate for product ABC8: (1) the direct labour rate variance, and (2) the direct labour efciency variance. (Round answers to the nearest whole dollar, e.g. 5,275.) (1) The direct labour rate variance $ (2) The direct labour efciency variance $

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