Question
On January 2012, the following Standard Cost Card relating to the cleaning agent product was extracted from the records of S & S Industries Ltd.,
On January 2012, the following Standard Cost Card relating to the cleaning agent product was extracted from the records of S & S Industries Ltd., Standard Cost Card Details $ Direct materials 2 kgs @ $95 190 Direct labour 2 hrs @ $50 100 Total cost 290 Page 4 of 5 Actual results for January 2012: Production 300 units Direct raw materials purchased 500 kgs at a cost of $54,000. Opening stock of direct raw materials 100 kgs Closing stock of direct raw materials 20 kgs Direct wages $24,000 for 500 hours Required: (a) Calculate direct raw material price variance. (4 marks) (b) Calculate direct raw material usage variance. (4 marks) (c) Calculate direct labour rate variance. (4 marks) (d) Calculate direct labour efficiency variance. (4 marks) (e) Identify two (2) possible causes of materials price variances. (4 marks)
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