Question Variance Analysis
MACIT Limited manufactured units during November of a special irrigation tool used by
farmers in Jamaica. The irrigation tool has the following standard prime cost:
Direct material: metres $ per metre..... $
Direct labour: $ per $
Standard prime cost per unit $
The actual results for MACIT Limited's special irrigation tool were as follows:
Direct material purchased
Direct material used
Direct labour
metres at $ per metre
metres
at $ per hr
Task A Compute the Direct Material Variances for:
Marks
i Price marks
ii Usage marks
Task B
Compute the Direct Labour Variances for:
Marks
iii. Rate marks
iv Efficiency marks
Task C
mark
List two reasons why companies adopt standard costing.
