l- Latif company manufactures CDs. The direct material and direct labor standards for one CD are given below. (4+4+7)

Standard quantity of hours Standard price or rate Standard cost

Direct material 5 pounds Rs.2.50 per pound Rs.12

Direct labor 0.5 hours Rs.10 per hour Rs. 2.50

During the most recent month, following activities was recorded:

a. Thirty thousand pounds of material were purchased at a cost of Rs.2 per pound.

b. All the material purchased was used to produce 5000 units of CDs.

c. 800 hours of direct labor time were recorded at a total labor cost of Rs. 10,500

Required:

1. Compute the following variances for the month:

a. Direct materials price and quantity variance

b. Direct labor rate and efficiency variances

2. Briefly explain the possible causes of each variance and their significance?

18. Q.No.4: Al-Latif company manufactures CD's. The direct material and direct labor standards for one CD are given below. (4+4+7) Standard quantity of hours Standard price or rate Standard cost Direct material 5 pounds Rs.2.50 per pound Rs.12 Direct labor 0.5 hours Rs.10 per hour Rs. 2.50 C. During the most recent month, following activities was recorded: a. Thirty thousand pounds of material were purchased at a cost of Rs.2 per pound. b. All the material purchased was used to produce 5000 units of CD's. 800 hours of direct labor time were recorded at a total labor cost of Rs. 10,500 Required: 1. Compute the following variances for the month: Direct materials price and quantity variance b. Direct labor rate and efficiency variances 2. Briefly explain the possible causes of each variance and their significance?* ! (15 Points) a. 18. Q.No.4: Al-Latif company manufactures CD's. The direct material and direct labor standards for one CD are given below. (4+4+7) Standard quantity of hours Standard price or rate Standard cost Direct material 5 pounds Rs.2.50 per pound Rs.12 Direct labor 0.5 hours Rs.10 per hour Rs. 2.50 C. During the most recent month, following activities was recorded: a. Thirty thousand pounds of material were purchased at a cost of Rs.2 per pound. b. All the material purchased was used to produce 5000 units of CD's. 800 hours of direct labor time were recorded at a total labor cost of Rs. 10,500 Required: 1. Compute the following variances for the month: Direct materials price and quantity variance b. Direct labor rate and efficiency variances 2. Briefly explain the possible causes of each variance and their significance?* (T) (15 Points) a