Kindly soove the following wuestion and shows step by step explanations.

Problem 1

Direct Labour Variances

Sky Inc. provides in-flight meals for a number of major airlines. One of the company's products in stuffed cannelloni with roasted pepper sauce, fresh baby corn, and spring salad. During the most recent week, the company prepared 6,000 of these meals, using 1,150 direct labour-hours. The company paid these direct labour workers a total of $11,500 for this work, or $10 per hour.

According to the standard cost card for this meal, it should require 0.20 direct labour-hours at a cost of $9.50 per hour.

Required:

1. What direct labour cost should have been incurred to prepare 6,000 meals? How much does this differ from the actual direct labour cost?

2. Break down the difference computed in (1) above into a labour rate variance and a labour efficiency variance.

Problem 2

Material and Labour Variances

The direct materials and direct labour standards for one bottle of Whisper perfume, a product of the Farante Company, are given below:

Standard Quantity Standard Price Standard

or Hours or RateCost

Direct materials7.2 grams$2.50 per gram$18.00

Direct labour0.4 hours$10.00 per hour$4.00

During the most recent month, the following activity was recorded:

a. Twenty thousand grams of material were purchased at a cost of $2.40 per gram.

b. All of the material was used to produce 2,500 bottles of Whisper.

c. Nine hundred hours of direct labour time were recorded at a total labour cost of $10,800.

Required:

1. Compute the direct materials price and quantity variances for the month.

2. Compute the direct labour rate and efficiency variances for the month.

Problem 3

Comprehensive Variance Analysis

Helix Company produces several products in its factory, including a karate robe. The company uses a standard cost system to assist in the control of costs. According to the standards that have been set for the robes, the factory has a denominator activity level of 780 direct labour-hours each month, which should result in the production of 1,950 robes. The standard costs associated with this level of production are as follows:

Per Unit of

Total Product

Direct materials$35,490$18.20

Direct labour$ 7,020 3.60

Variable manufacturing overhead*$ 2,340 1.20

Fixed manufacturing overhead*$ 4,680 2.40

$25.40

*Based on direct labour-hours

During April, the factory worked only 760 direct labour-hours and produced 2,000 robes. The following actual costs were recorded during the month:

Per Unit of

Total Product

Direct materials (6,000 metres) $36,000$18.00

Direct labour$ 7,600 3.80

Variable manufacturing overhead$ 3,800 1.90

Fixed manufacturing overhead$ 4,600 2.30

$26.00

At standard, each robe should require 2.8 metres of material. All of the materials purchased during the month were used in production.

Required:

Compute the following variances for April:

1. The materials price and quantity variances.

2. The labour rate and efficiency variances.

3. The variable manufacturing overhead spending and efficiency variances.

4. The fixed manufacturing overhead budget and volume variances.