Tractor Corporation produces toy tractors. The company uses thefollowing direct cost categories:
| Category | Standard Inputs
for 1 output | Std. Cost
per input |
| Direct Materials | 4.00 | $12.50 |
| Direct Labour | 1.40 | 9.50 |
| Direct Marketing | 0.54 | 5.50 |
Actual performance and budgeted performance for the company isshown below:
Actual output: (in units) 5,000
Direct Materials:
| Materials costs | $299,000 |
| Input purchased and used | 23,000 |
| Actual price per input | $13.00 |
Direct Manufacturing Labour:
| Labour costs | $ 95,000 |
| Labour-hours of input | 9,500 |
| Actual price per hour | $10.00 |
Direct Marketing Labour:
| Labour costs | $ 40,000 |
| Labour-hours of input | 5,000 |
| Actual price per hour | $ 8.00 |
Question 1: What is the price variance of the directmaterials?
| | a) $10,175 unfavourable |
| | b) $15,213 favourable |
| | c) $16,875 favourable |
| | d) $11,500 favourable |
| | e) $11,500 unfavourable |
Question 2: What is the direct manufacturinglabour efficiency variance?
| | a) $500 favourable |
| | b) $672 favourable |
| | c) $500 unfavourable |
| | d) $28 favourable |
| | e) $672 unfavourable |
