Morry Games developed a new play station called AWESOME. Morry Games has a standard cost system to help control its costs. The following standards have been established for AWESOME. • Direct materials 15 grams per AWESOME. • Standard direct material cost per AWESOME is $10. • Direct labour 1.2 hours per AWESOME. • Standard cost of direct labour is $14.40 per AWESOME. • During May the company produced 9,000 AWESOME units. Production data for May are: • Direct materials: 165,000 grams were purchased at a cost of $104,000; 20,000 grams of this was still in inventory at the end of the month. • Direct labour: 11,400 direct labour hours were worked at a cost of $142,500. Required: (a) Calculate Direct materials price and quantity variances. (b) Calculate Direct labour price and quantity variances.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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Morry Games developed a new play station called AWESOME. Morry Games has a standard cost system to help control its
costs. The following standards have been established for AWESOME.
• Direct materials 15 grams per AWESOME.
• Standard direct material cost per AWESOME is $10.
• Direct labour 1.2 hours per AWESOME.
• Standard cost of direct labour is $14.40 per AWESOME.
• During May the company produced 9,000 AWESOME units.
Production data for May are:
• Direct materials: 165,000 grams were purchased at a cost of $104,000; 20,000 grams of this was still in inventory at the end
of the month.
• Direct labour: 11,400 direct labour hours were worked at a cost of $142,500.
Required:
(a) Calculate Direct materials price and quantity variances.
(b) Calculate Direct labour price and quantity variances.
Transcribed Image Text:Morry Games developed a new play station called AWESOME. Morry Games has a standard cost system to help control its costs. The following standards have been established for AWESOME. • Direct materials 15 grams per AWESOME. • Standard direct material cost per AWESOME is $10. • Direct labour 1.2 hours per AWESOME. • Standard cost of direct labour is $14.40 per AWESOME. • During May the company produced 9,000 AWESOME units. Production data for May are: • Direct materials: 165,000 grams were purchased at a cost of $104,000; 20,000 grams of this was still in inventory at the end of the month. • Direct labour: 11,400 direct labour hours were worked at a cost of $142,500. Required: (a) Calculate Direct materials price and quantity variances. (b) Calculate Direct labour price and quantity variances.
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