Ford Company produces a single product. The company has set the following standards for materials and labour:

	Direct Materials	Direct Labour
Standard quantity or hours per unit	? kilograms	3 hours
Standard price or rate	? per kilogram	$15 per hour
Standard cost per unit	?	$45

During the month of April, the company purchased 7,000 kilograms of direct materials at a cost of $26,250. All of this material was used in the production of 1,300 units of product. Direct labour cost totalled $55,125 for the month. The following variances have been computed:

Materials price variance	$1,750 favourable
Total materials variance	$250 unfavourable
Labour efficiency variance	$6,000 favourable

Required: (YOU MUST SHOW ALL OF YOUR WORK FOR FULL MARKS) a) [5 Marks] For direct materials, compute:

(i) the standard price per kilogram;

(ii) the materials quantity variance;

(iii) the standard quantity allowed for materials in total for the month's production; and (iv) the standard quantity per unit of product.

b) [2 Marks] An unfavourable material quantity variance, could be the caused by a favourable materials price variance. Is this possible? If so, please provide an example of how this could happen.

c) [4 Marks] For direct labour, compute:

(i) the actual direct labour cost per hour for the month; and

(ii) and the labour rate variance. Is the labour rate variance favourable or unfavourable?

d) [2 Marks] Suppose that Ford Company enters its Standard Costs and Variances into its accounting records. The price variance would be entered into the books when the materials purchase is made. What would the Journal Entry be to record the purchase of materials on account for the month of April?