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Specialist Homewares manufactures a variety of homeware goods. As part of its evaluation activities, management regularly reviews the direct material and direct labour variances

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Specialist Homewares manufactures a variety of homeware goods. As part of its evaluation activities, management regularly reviews the direct material and direct labour variances of its product lines. The following information relates to the Titan product range. Standard cost per unit is budgeted at 0.75 kg of raw materials and at 1.5 direct labour hours. The cost in respect of the raw materials is budgeted at $29 per kg and labour is budgeted at $15 per hour. Junior workers are budgeted at $15 per hour and Senior workers are budgeted at $20 per hour. The planned production was for 50,000 units and the actual production was 48,000 units. The actual amount of raw materials purchased was 38,000 kg at a cost of $950,000. The amount of raw materials utilised for the actual production was 41,280 kg and the labour cost of $1,056,000 with 52,800 direct labour hours worked. The company also recently engaged a new raw materials supplier. 1a)

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