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Standard Costing and Variance Analysis The Whisky Brothers' Melbourne distillery produces hand-crafted gin. The firm's standard costs for its lemon-myrtle infused line includes the following
Standard Costing and Variance Analysis
The Whisky Brothers' Melbourne distillery produces hand-crafted gin. The firm's standard costs for its lemon-myrtle infused line includes the following for January 2023:
Standard Amount per bottle | Standard Price per bottle | |
Direct Material (lemon myrtle) | 31 grams (per bottle) | $115 per kg |
Direct Labour | 5.5 minutes (per bottle) | $38.00 (per hr) |
During January 2023:
- 2,600 bottles were produced.
- The actual direct labour hours worked was 236 hours at a cost of $8,944 to the firm.
- 83 kgs of lemon myrtle was purchased and used to meet production requirements and the cost of this material was $9,711.
- Use Excel to calculate the:
- Direct Material Price (Rate) variance,
- Direct Material Quantity (Usage/Efficiency) variance, and
- Total Direct Material variance for the month of December.
- Use Excel to calculate the:
- Direct Labour Price (Rate) variance,
- Direct Labour Efficiency variance, and
- Total Direct Labour variance for the month of December.
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