Question
Smooth Ltd. manufactures a product. The company has recently established a standard cost system to help control costs and established the following standards for the
Smooth Ltd. manufactures a product. The company has recently established a standard cost system to help control costs and established the following standards for the product: Direct materials 3 metres per unit at $5.00 per metre Direct labour 1.6 hours per unit at $8.00 per hour During February, the company produced 3,200 units. Production data for February follows: Direct materials 12,000 metres were purchased for use in production at a cost of $5.30 per metre. Some 1,500 metres of material were still in inventory at the end of February. Direct labour 4,900 hours were worked at a cost of $36,750. Required: a) Calculate the direct material price and quantity variances. (4 marks) Enter unfavourable (U) variances and favourable (F) as absolute numbers. Material price variance $ Material quantity variance $ b) Calculate the direct labour rate and efficiency variances. (4 marks) Enter unfavourable (U) variances and favourable (F) as absolute numbers. Direct labour rate variance $ Direct labour efficiency variance $ c) Show the information needed to record the material quantity variance journal entry starting with the debit(s). (3 marks) Account Amount Debit or Credit
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started