P$10\mathrm{.}31$

Direct material and labour variances: manufacturer LO $10\mathrm{.}4,10\mathrm{.}5$

During January, Gold Star Ltd produced $1000$ units of a special product called Asteryx, which only requires a single raw material input. The accounting records indicated the following:

Direct material purchased

$54000$ kilograms @ $$4\mathrm{.}14$ per kilogram

Direct material used

$28500$ kilograms

Direct labour

$6300$ hours @ $$54$ per hour

Asteryx has the following standard prime costs:

Direct material: $30$ kilograms @ $$4\mathrm{.}05$ per kilogram

$ $121\mathrm{.}50$

Direct labour hours: $6$ hours @ $$51$ per hour

$306\mathrm{.}00$

Standard prime cost per unit

$ $427\mathrm{.}50$

Required

Calculate the total standard direct material costs and direct labour costs for January.

For the month of January, calculate the following variances, indicating whether each is favourable or unfavourable:

$($a$)$ direct material price variance

$($b$)$ direct material quantity variance

$($c$)$ direct labour rate variance

$($d$)$ direct labour efficiency variance.

Construct an Excel$$spreadsheet to solve requirements $1$ and $2.$ Demonstrate how the solution will change if the following information changes: the standard direct labour rate is $$60$ per hour and the standard direct material price is $$4\mathrm{.}50$ per kilogram.