Required (show your calculations)

A) Calculate the materials price variance, and mention three potential reasons for the variance result.

B) Calculate the materials quantity variance, and mention three potential reasons for the variance result.

C) Calculate the labour efficiency variance, and mention three potential reasons for the variance result.

Question 4 Standard Costing and Variances Part A Queenstown Baggage Limited has developed the following cost standards for the production of its leather backpacks: Leather (0.9 metre x $22 per metre) Direct labour (1.3 hours x $9 per hour) Variable overhead (1.3 hours x $15 per hour) Text Standard cost per backpack $19.80 $11.70 $19.50 Variable overhead at the company is applied on the basis of direct labour hours. The actual results for last month were as follows: Number of backpacks produced Direct labour hours incurred Metres of leather purchased Metres of leather used in production Cost of leather purchased Direct labour cost Variable overhead cost 15,000 18,800 14,500 14,100 $306,675 $159,800 $285,760