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Noplastic company produces paper bags for Grocery stores. The Company uses standard costing system to monitor and control costs. The standards for materials and labour
Noplastic company produces paper bags for Grocery stores. The Company uses standard costing system to monitor and control costs. The standards for materials and labour costs to manufacture 1 bag are as follows: Direct materials: 7.2 lbs. @ $5 per lb. $36.00 Direct labour: 0.4 hours @ $20 per hour $8.00 During the last month, Noplastic produced 2,500 large bags. Twenty thousand (20,000) lbs. of direct materials were purchased @ $4.80 per lb. There was no direct materials inventory at the beginning and end of the month. Nine hundred (900) direct labour hours were recorded @ $24 per hour. Required: 1. Compute direct materials price and quantity variance. 2. Compute direct labour rate and efficiency variance. 3. What is the total materials variance? 4. What is the total labour variance
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