Question
QUESTION 1 Ameen Ceramic is ceramic manufacturer that has been established in Ipoh for a long time. Bina Ceramic has hired many foreign workers and
QUESTION 1 Ameen Ceramic is ceramic manufacturer that has been established in Ipoh for a long time. Bina Ceramic has hired many foreign workers and uses the following rule to determine whether labour efficiency variance should be investigated: A labour efficiency variance will be investigated when the variance is greater than either RM400 or 10 per cent of the standard labour costs. In March 2023, 1,550 direct labor hours were worked at a total labor cost of RM15,810 to make1,000 ceramics. Its standard hours of labour is 1.5 hours per ceramic at $10.00 per direct labor hour. Ameen as the business owner asked Syamil the production manager to clarify the variance. Required: a. Determine Ameen's Direct Labour efficiency variance and whether it is favourable or unfavourable. (4 marks) b. Comment on the variance of whether it should be investigated according to the two policies stated. (11 marks) c. Justify THREE (3) reasons for the variance and recommend TWO (2) ways to prevent the above issue from recurring. (10 marks)
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