Question
Langille Industries employs a standard cost system. Langille has established the following standards for the prime costs of its Target Brand product line. Standard Standard
Langille Industries employs a standard cost system. Langille has established the following standards for the prime costs of its Target Brand product line.
Standard Standard Standard
Quantity Price Unit Cost
Direct Materials 8 kg $1.80 / kg $14.40
Direct Labour 0.125 DLH $16.00 / DLH 2.00
$16.40
During November, Langille purchased 160,000 kg of direct materials at a total cost of $304,000. The total factory wages for November were $42,000, 90% of which were for direct labour. Langille manufactured 19,000 Target Brand during November, using 142,500 kg of direct materials and 2,500 direct labour hours.
- What was the direct materials quantity variance for November?
- What was the direct labour rate variance for November?
- What was the direct labour efficiency variance for November?
- Over the past year, Langille management team attempted to reduce the number of customer complaints relating to the product by sourcing higher-quality direct materials from a different supplier. What effect has this had on direct materials costs? Do you recommend that they continue the practice?
Please do not copy others answers.
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