(c) Calculate the labour rate variance and labour efficiency variance, indicating a favourable or...
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Accounting
(c)
Calculate the labour rate variance and labour efficiency variance, indicating a favourable or unfavourable variance.
(6 marks)
(d)
Give ONE (1) possible reason for each of the variances computed in (c).
(2 marks)
Pro-Clean Pte Ltd provides deep cleaning services for office spaces. Operating costs are difficult to control, so standard costs and standard cost var iances are reported. The fol lowing standards were developed for the 'maxiprotect' sanitising service. This is one of the company's major products: During May, Pro-Clean Pte Ltd purchased 160,000 litre of ethanol at a total cost of $304,000. The total wages for May were $5,000,40 per cent of which was direct labour cost of the maxiprotect sprays. Pro-Clean completed 40 maxiprotect sanitizing services during May, using 400 litres of ethanol and 90 direct labour hours
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