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Part B DY Company produces coats. The company uses a standard costing system and has set the following standards for materials and labour: Directmaterials(8metresoffabric@@$6permetre)Directlabour(2hours@$18perhour)$48$36 During
Part B DY Company produces coats. The company uses a standard costing system and has set the following standards for materials and labour: Directmaterials(8metresoffabric@@$6permetre)Directlabour(2hours@$18perhour)$48$36 During the year DY Company produced 55,000 coats. Actual materials purchased and used was 460,000 meters at $5.75 per metre. Actual direct labour was 120,000 hours at $19.25 per hour. Required: (i) Determine the materials price variance and whether it is favourable or unfavourable. (3 marks) (ii) Determine the materials usage variance and whether it is favourable or unfavourable. (3 marks) (iii) Determine the total materials variance and whether it is favourable or unfavourable. (2 marks) (iv) What are the possible causes for the material price and usage variance? (2 marks)
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