Question
Mike Manufacturing has the following standard cost sheet for one of its products: Direct materials (6...
Mike Manufacturing has the following standard cost sheet for one of its products:
|
Direct materials (6 ft. @ $5) |
$30 |
|
Direct labour (1.5 hours @$10) |
15 |
|
Variable overhead (1.5 hours@ $4) |
6 |
|
Fixed overhead (1.5 hours@ $2*) |
3 |
|
Standard unit cost |
54 |
The rate based on expected activity of 17,000 hours.
During the most recent year, the following actual results were recorded:
|
Production |
12,000 units |
|
Fixed overhead |
$33,000 |
|
Variable overhead |
$69,000 |
|
Direct materials (71,750 ft. purchased) |
$361,620 |
|
Direct labour (17,900 hours) |
$182,580 |
Required:
I. Calculate direct materials price variance ($)
II. Calculate direct Labour efficiency variances ($)
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