SECTION B (60 marks) Question 3 Answer only THREE (3) of the FOUR (4) questions. Each question is worth 20 marks. Show your workings clearly and include any assumptions that you feel are necessary in your answers. (20 marks) Con The White Flint Company uses standard costing Direct materials are purchased by Margaret Kwok, the purchasing manager. Andrew Yip is responsible for production. There are no beginning or ending inventories for June 2016. The standard price of the chemical used as the principal direct material was $5 per kitogram. The standard quantity was 6 kilograms per case of finished product. The standard price for direct manufacturing labour was $35 per hour. The standard quantity of labour was 0.5 hour per case of finished product, During June, White Flint produced 10,000 cases of finished product. Actual labour costs were $195,000 for 6,500 actual hours. During the month, 71.000 kilograms of chemicals were acquired and consumed at a price of $4.50 per kilogram, Required: (a) (10 marks) Determine the direct material price variance, the direct material efficiency variance, the direct manufacturing labour price variance and the direct manufacturing labour efficiency variance. (b) As the supervisor of the purchasing manager and the production manager, how would you assign responsibility for each of the variances calculated in requirement (8) above to each manager under the following scenarios: (1) The direct material variances are attributable to the purchase (5 marks) of poor-quality materials. The quality of direct materials is fine but the production (5 marks) manager used cheaper, less-skilled workers in June. (Source: Adapted from Horngren et al, Cost Accounting: A Managerial Emphasis, 15e, Pearson, pp 33 34, 07-37) Question 4 (20 marks) Pilot Company manufactures and sells one type of outdoor furniture. Pilot's budgeted and actual variable manufacturing costs are $160 per unit, and budgeted and actual total fixed manufacturing costs are $2,160,000 per year. Its practical annual capacity is 6,000 units, and, for the past few years, its budgeted and actual sales and production volume have been 6,000 units per year. Pilot calculates full manufacturing cost per unit as the sum of the variable ACT B313F (1602) Page 5 of 2