Arzu Inc. produces premium protective car covers. The direct materials and direct labour standards for one car cover are as follows: Direct materials Direct labour Variable overhead ● · Standard Quantity or Hours 8.00 metres of cloth 0.40 hours 0.40 hours Budgeted fixed overhead cost is $19,100, and the normal production volume is 2,885 car covers. Overhead is applied on the basis of direct labour-hours. In September, the following activity was recorded: . 21,600 metres of cloth were purchased at a cost of $9.50 per metre. All of the purchased material was used to produce 2,700 car covers. 530 direct labour-hours were recorded at a total labour cost of $9,540. Standard Price or Rate $10 per metre $18 per hour $7 per hour Direct materials price variance Direct materials quantity variance Total direct material cost variance Standard Cost $80.00 $ 7.20 $ 2.80 Actual variable overhead cost was $4,500, and fixed overhead cost was $18,550. Required: 1. Compute all direct materials variances for September. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) teria s pric = AG = 21 = 21 = $2 s qua = SF = $5 = $5 = $5 $5 tion to

Arzu Inc. produces premium protective car covers. The direct materials and direct labour standards for one car cover are as follows: Direct materials Direct labour Variable overhead ● · Standard Quantity or Hours 8.00 metres of cloth 0.40 hours 0.40 hours Budgeted fixed overhead cost is $19,100, and the normal production volume is 2,885 car covers. Overhead is applied on the basis of direct labour-hours. In September, the following activity was recorded: . 21,600 metres of cloth were purchased at a cost of $9.50 per metre. All of the purchased material was used to produce 2,700 car covers. 530 direct labour-hours were recorded at a total labour cost of $9,540. Standard Price or Rate $10 per metre $18 per hour $7 per hour Direct materials price variance Direct materials quantity variance Total direct material cost variance Standard Cost $80.00 $ 7.20 $ 2.80 Actual variable overhead cost was $4,500, and fixed overhead cost was $18,550. Required: 1. Compute all direct materials variances for September. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) teria s pric = AG = 21 = 21 = $2 s qua = SF = $5 = $5 = $5 $5 tion to

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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