ks 1& 2 pending * FNSACC613 05-6.pdf Als/FNSACC613%20Q5-6.pdf Direct Materials: Direct Labour: Factory Overhead: 2 metres @$1.80 per metre 40 minutes $12 per hour 40 minutes $6 per hour $3.60 $8.00 $4.00 The factory overhead rate was arrived at using the following annual budgets: Variable factory overhead Fixed factory overhead $80,000 160,000 240,000 Estimated production for the year is 60,000 shirts (spread evenly over 12 months). Management keeps cost records and calculates material, labour and overhead variances. Details of actual results for the month of July were as follows: 4,800 shirts were produced 9,780 metres of materials were used 3,300 direct labour hours were worked at a cost of $39,930 Other actual results for the month of July were: Materials purchased on credit 10,000 metres @$1.90 per metre Factory overhead incurred fixed $13,800 Factory overhead incurred variable $6,800 There was no opening or closing work in process. The materials are held in stock at standard cost with the materials price variance being recognised at the earliest point. Required: a. Calculate the direct material price variances (on purchases) & direct material efficiency (quantity) variance. Interpret those findings either favourable or unfavourable material price or efficiency variance. b. Calculate the direct labour rate variance & direct labour efficiency variance. Interpret those findings either favourable or unfavourable labour rate or efficiency variance. C. Calculate three factory overhead variances & interpret either those are favourable or unfavourable overhead variances. d. Please review those findings from parts a, b, c & give your recommendations for further action to the management. How these seven variances are going to affect the budgets already been prepared? MacBook Air