Cool Leather Products (CLP) produces leather clothing and accessories. Thecompany has developed a static budget for its leather purses manufacturingdepartment for the first quarter. During the quarter the actual activity was 22,000direct labour hours. Results at the end of the first quarter are shown below.Direct labour hoursDirect materialsDirect labourRentShare of fixed manufacturing overheadTotal CostsStatic BudgetActual20,000 22,000$80,000 $91,000160,000 174,00048,000 50,00012,00011,000$300,000 $326,000Required:a) Calculate relevant variances to assess cost control for the manufacturingdepartment.b) Provide a reasonable explanation for the variances with respect to direct materialsand direct labour.

The objective of the question is to calculate the variances between the static budget and actual…

Answered: Cool Leather Products (CLP) produces…

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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