The direct materials and direct labour standards for one bottle of Clean-All spr
ID: 2567886 • Letter: T
Question
The direct materials and direct labour standards for one bottle of Clean-All spray cleaner are given below:
The direct materials and direct labour standards for one bottle of Clean-All spray cleaner are given below: Standard Price or Rate $0.30 per millilitre Standard Cost $ 1.50 $4.80 Standard Quantity or Hours Direct materials Direct labour 5.0 millilitres 0.4 hours $12.00 per hour During the most recent month, the following activity was recorded a. 28,000 millilitres of material was purchased at a cost of $0.25 per miitre. b. All of the material was used to produce 3,000 bottles of Clean-Al c. 675 hours of direct labour time was recorded at a total labour cost of $8,100. Required 1. Compute the direct materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Materials price variance Materials quantity varianceExplanation / Answer
1 Materials price variance = 28000*(0.25-0.3)= 1400 Favorable Materials quantity variance = 0.3*(28000-3000*5)= 3900 Unfavorable 2 Labour rate variance = 8100-(675*12)= 0 None Labour efficiency variance = 12*(675-3000*0.4)= 6300 Favorable