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Rouble Ltd. manufactures glass ornaments that are decorated by hand. The company's standard costs per unit are as follows: Quantity Cost Total Direct materials 20g
Rouble Ltd. manufactures glass ornaments that are decorated by hand. The company's standard costs per unit are as follows: Quantity Cost Total Direct materials 20g 50.75 $15.00 Direct labour 0.50 hours $15/DL hour 57.50 Manufacturing overhead 0.50 hours 59/DL hour $4.50 $27.00 TE The manufacturing overhead rate can be broken down between variable and fixed overhead. The company estimates freed overhead to be $3.00 per direct labour hour. The company expected to make 950 ornaments using 475 direct labour hours during the month. Based on these estimates variable conthead was budgeted to be 52.800 and fixed overhead was budgeted to be 51.400, in the month. the company actually made 920 ornaments. Actual variable overhead was $2.900 and actual fixed overhead was 51.250, The following information is known 1) The company purchased 22.000g of direct materials for a total cost of $18,000. 2) The company had no beginning inventory and had 3,800g of material on hand at the end of the month, 3) The direct labour workforce worked a total of 510 hours and was paid 57.275, Required: a) Calculate the Direct Materials price and quantity variances b) Calculate the Direct Labour rate and efficiency variances The company recently entered into a contract with a new supplier. Should the company continue to work with this supplier? 10) The company experimented using more junior staff and fewer senior staff this month. Should the company continue with this labour mu
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