EXHIBIT A 3. Calibur Tool Company manufactures a single product. The following infarmation is available regarding the standards for the product: Each saleable finished unit consists of 5 grams of direct materials. (1) (2) (3) As a result of the nature of the direct materials used and the production process, 12.25 % of the direct materials used in production are lost. Standard Quantity Standard Price or Rate Standard Cost or Hours Inputs (1) x (2) The ideal direct labour time required to produce one saleable finished unt is 1.5 hours Direct labour is paid for 8 hours, which includes an hour for breaks and cleanup Direct Maberials Direct Labour Variable Manufacturing Overhead Total standard cops per unit 5% of the units produced have too be scrapped (at zero value) due to poor quality Direct materials cost $400 per kilogram plus an additional 25% for customs and excise duties and shipping costs Direct labour is paid at $20 per hour. Variable averhead is allocated using diredt labour-hours as a base, at a rate of $5 per hour During June, 2,000 units were produced. The costs associated with June's cperations were as fallows: Materials purchased: 18 kilograms at $600/kg $10,800 Materials used in production: 14 kilograms Direct labour: 4,000 hours at $19.50 per hour $78,000 Variable manufacturing overhead costs incurred $20,800 Required: a) Develop a standard cast card for the product produced by Company (use Exhibit A as a guide) b) Compute the materials, labour, and variable manufacturing overhead variances for the month of June. 6Page 7IPage Page 6 of 7