question 1

Answer the following questions regarding standard costing:

The following data relates to QA firm.

Cost standards:

Direct Material 3 kg @2.50 per kg $7.50

Direct Labour 5 hours @7.50 per hour $37.50

Actual results:

Direct material purchased 25,000kg at 2.60 $65,000

Direct material used 23,100kg

Direct labour 40,100 hours @$7.30 $292,730

(a) calculate the two material variances

(b) calculate the two labour variances

question 2

Clean Living is a travel company that specialises in green tours. These types of tours are growing in popularity. Green Tours has noticed new entrants into the market place. Even some of the regular tour companies are starting to offer green tours. The managing Director has asked you to design and implement a new performance measurement system to help protect against competitors. The following are the objectives to support the four perspectives:

• Improve cash flows
• Improve profits
• Increase market share
• Increase customer satisfaction
• Develop innovative tours
• Increase environmental knowledge of employees

(a) Design a Balanced scorecard with the above objectives

(b) Draw a strategy map for clean living outlining the objectives and measures with the 4 perspectives.