Question 5 (15 marks) Standard Costs and Variance Analysis

STEFANO Company makes laptops, for which the following standards have been developed:

Direct Costs	Standard Inputs Expected for Each Unit of Output	Standard Price Expected per Unit of Output
Direct materials	2 kilograms	$4.1 per kilogram
Direct labour	4 hours	$24 per hour

During March, production of 100 laptops was expected, but 80 laptops were actually completed. Direct materials purchased and used were 170 kilograms at an actual price of $4 per kilogram. Direct labour cost for the month was $7,000, and the actual pay per hour was $23.00.

Instructions:

1. Compute the direct-material price variance for March. (3 marks)

2. Compute the direct-material quantity variance for the month of March. (3 marks)

3. Compute the direct-labour rate (price) variance for the month of March. (3 marks)

4. Compute the direct-labour efficiency (quantity) variance for the month of March. (3 marks)

5. What problems/issues would you report to STEFANOs top management that relate to your findings in parts (a) to (d)? (3 marks)