Question 3 (20 marks) Better Co. Manufacturing's costings system has two direct cost categories: direct materials and direct manufacturing labour. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard DMLH (direct manufacturing labour hours). At the beginning of 2022, Better Co. adopted the following standards for its manufacturing costs: Direct Materials Direct manufacturing labour Manufacturing Overhead Variable Fixed Standard manufacturing costs per output unit Input 3kg at $5 per Kg 5 hours at $15 per hour $6 per DMLH $8 per DMLH Cost per Output Unit $ 15 75 30 40 $160 The denominator level for total manufacturing overhead per month in 2022 is 40,000 DMLH. Better Co. flexible budget for January 2022 was based on this denominator level. The records for January indicate the following: Direct materials purchased Direct materials used Direct manufacturing labour Total actual manufacturing overhead (variable and fixed) Actual production Required: 25,000 kg at $5.20/kg 23.100 kg 40,100 hours at $14.80/hour $600,000 7,800 output units 1. Calculate/prepare a schedule of the standard manufacturing costs for the 7,800 output units in January 2022. (5 marks) 2. For January 2022, calculate the following variances, indicating whether each is favourable (F) or unfavourable (U) (7 X 2 marks each, 1 bonus mark) a) direct material rate variance, based on purchases b) direct material efficiency variance c) direct manufacturing labour rate variance d) direct manufacturing labour efficiency variance e) total manufacturing overhead rate variance f) VMOH efficiency variance g) production volume variance Question 3 (20 marks) Better Co. Manufacturing's costings system has two direct cost categories: direct materials and direct manufacturing labour. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard DMLH (direct manufacturing labour hours). At the beginning of 2022, Better Co. adopted the following standards for its manufacturing costs: Direct Materials Direct manufacturing labour Manufacturing Overhead Variable Fixed Standard manufacturing costs per output unit Input 3kg at $5 per Kg 5 hours at $15 per hour $6 per DMLH $8 per DMLH Cost per Output Unit $ 15 75 30 40 $160 The denominator level for total manufacturing overhead per month in 2022 is 40,000 DMLH. Better Co. flexible budget for January 2022 was based on this denominator level. The records for January indicate the following: Direct materials purchased Direct materials used Direct manufacturing labour Total actual manufacturing overhead (variable and fixed) Actual production Required: 25,000 kg at $5.20/kg 23.100 kg 40,100 hours at $14.80/hour $600,000 7,800 output units 1. Calculate/prepare a schedule of the standard manufacturing costs for the 7,800 output units in January 2022. (5 marks) 2. For January 2022, calculate the following variances, indicating whether each is favourable (F) or unfavourable (U) (7 X 2 marks each, 1 bonus mark) a) direct material rate variance, based on purchases b) direct material efficiency variance c) direct manufacturing labour rate variance d) direct manufacturing labour efficiency variance e) total manufacturing overhead rate variance f) VMOH efficiency variance g) production volume variance