Ques

11 marks UESTION 2 Standard Costs standard cost Mesore industries called Cleano. The company uses a manufactures a product Cleano system and has established the fol standards for one unit of rate standard Cost dard or Standard price or DIrect material feet 4.00 pel 15.00 Direct labour 1.5 hrs 10.00 per hour Variable overh 1.5 hrs 3.00 hou 35.50 Total cost per unit During March, the company recorded this activity relative to production of Cleano: (a) The company produced 18, ooo units during March. (b) Purchased 72,20o feet of material at a cost of 4.20 per foot. (c) Used 71 ooo feet of material production. s 9.8o per hour. (d) Worked 29, 250 direct labour hours at a cost of s for the month. (e) incurred a total variable manufacturing overhead cost of (up Calculate the materials price variance. (1 mark) (2) Calculate the materials quantity variance. (1 mark) (3) Prepare journalentries to record material price and material quantity variances. (3 marks) Page 5 of 22