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QUESTION:
Rosemary Inc. bakes delicious cakes for Maple Leaf victory parties.
This year, the parties have been sporadic due to a global pandemic.
The company used the following standards:
| | Standard |
| Direct material per unit (kg) | 2.00 |
| Material price per kg | $4.00 |
| Labour time per unit | 0.20 hrs |
| Direct labour rate (per hour) | $11.25 |
The following actual information was also available:
| | Actual |
| Production units | 35,000 |
| Total direct material purchased (kg) | 75,000 |
| Total direct material used (kg) | 72,000 |
| Total labour time | 7250 hrs |
| Material price per kg | $4.10 |
| Direct labour rate (per hour) | $11.15 |
Use the above information to answer the following quesitons.
Compute the amount of the direct materials price variance.
HINT: remember the entry rules!
Indicate if the direct materials price variance is Favourable (enter F) or Unfavourable (enter UF).
HINT: Enter your letter without any additional spaces!
Compute the amount of the direct materials usage (efficiency) variance.
HINT: remember the entry rules!
Indicate if the direct materials usage (efficiency) variance is Favourable (enter F) or Unfavourable (enter UF).
HINT: Enter your letter without any additional spaces!
Compute the amount of the direct labour rate (price) variance.
HINT: remember the entry rules!
Indicate if the direct labour rate (price) variance is Favourable (enter F) or Unfavourable (enter UF).
HINT: Enter your letter without any additional spaces!
Compute the amount of the direct labour efficiency (or usage) variance.
HINT: remember the entry rules!
Indicate if the direct labour efficiency (usage) variance is Favourable (enter F) or Unfavourable (enter UF).
HINT: Enter your letter without any additional spaces!
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