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QUESTION B. The Ebonie Ltd Manufacturing Company's costing system has two direct cost categories: direct materials and direct manufacturing labour. Manufacturing overhead (both variable and

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QUESTION B. The Ebonie Ltd Manufacturing Company's costing 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 direct manufacturing labour-hours (DLH). At the beginning of 2024, Ebonie Ltd adopted the following standards for its manufacturing costs: Cost per output unit 33.60 122.50 Direct materials (kg) Direct manufacturing labour (hours Manufacturing overhead: Variable (DLH) Fixed (DLH) Standard manufacturing cost per 56.00 63.00 275.10 S o c = = _ NN e ol|o (=] )] The denominator level for total manufacturing overhead per month in 2024 is 8,000 direct manufacturing labour-hours. Ebonie Ltd Manufacturing's flexible budget for January 2024 was based on this denominator level. The records for January indicated the following: Direct materials purchased (kg 24,000 | $ 6.20 Direct materials used (kg 22,000 _ Direct manufacturing labour (hours) 42,000 | $ 18.50 Total actual manufacturing overhead _ (Variable plus Fixed) Actual production (output units) 8,250 $ 67000000 | Required 1. Prepare a schedule of total standard manufacturing costs for the output units in January 2024. [3 marks] 2. For the month of January 2024, calculate the following variances, indicating whether each is favourable (F) or unfavourable (U): a. direct materials price variance, based on purchases [2 marks] b. direct materials efficiency variance [2 marks] c. direct manufacturing labour price variance [1 marks] d. direct manufacturing labour efficiency variance [1 marks] e. total manufacturing overhead spending variance [2 marks] f. variable manufacturing overhead efficiency variance [2 marks] g. fixed overhead production-volume variance. [2 marks]

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