Required: 1. Compute the following for direct labour a Standard price per kilogram for materials b. Standard quantity allowed for materials for the month's production c. Standard quantity of materials allowed per unit of product kgs. kgs per unit 2. Compute the following for materials price variance. (Round your answers to 2 decimal places.) a Actual direct labour cost per hour for the month b Labour rate variance
Required: 1. Compute the following for direct labour a Standard price per kilogram for materials b. Standard quantity allowed for materials for the month's production c. Standard quantity of materials allowed per unit of product kgs. kgs per unit 2. Compute the following for materials price variance. (Round your answers to 2 decimal places.) a Actual direct labour cost per hour for the month b Labour rate variance
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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![Talia Company produces a single product. The company has set standards as follows for materials and labour
Direct Materials
? kilograms
Direct Labour
1.25 hours
10 per hour
? per kilogram $
?
$
11.25
Standard quantity or hours per unit
Standard price or rate.
Standard cost per unit
During the past month, the company purchased 3,000 kilograms of direct materials at a cost of $8,250. All of this material was used in
the production of 700 units of product. Direct labour cost totalled $6,825 for the month. The following variances have been computed:
Materials quantity variance
Total materials variance
Labour efficiency variance
Required:
1. Compute the following for direct labour.
$ 600 U
$150 F
$ 2,250 F
a Standard price per kilogram for materials.
b. Standard quantity allowed for materials for the month's production.
C
Standard quantity of materials allowed per unit of product
a Actual direct labour cost per hour for the month
b. Labour rate variance
kgs
kgs per unit
2. Compute the following for materials price variance. (Round your answers to 2 decimal places.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe909139c-4e08-4302-ac1f-b75bbd6b9a06%2F7891f1c0-9f54-4f7e-9e6a-3a9d331b3c4f%2Figyd7nk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Talia Company produces a single product. The company has set standards as follows for materials and labour
Direct Materials
? kilograms
Direct Labour
1.25 hours
10 per hour
? per kilogram $
?
$
11.25
Standard quantity or hours per unit
Standard price or rate.
Standard cost per unit
During the past month, the company purchased 3,000 kilograms of direct materials at a cost of $8,250. All of this material was used in
the production of 700 units of product. Direct labour cost totalled $6,825 for the month. The following variances have been computed:
Materials quantity variance
Total materials variance
Labour efficiency variance
Required:
1. Compute the following for direct labour.
$ 600 U
$150 F
$ 2,250 F
a Standard price per kilogram for materials.
b. Standard quantity allowed for materials for the month's production.
C
Standard quantity of materials allowed per unit of product
a Actual direct labour cost per hour for the month
b. Labour rate variance
kgs
kgs per unit
2. Compute the following for materials price variance. (Round your answers to 2 decimal places.)
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