The direct materials and direct labour standards for one bottle of Clean-All spray cleaner are given below: Standard Quantity or Hours Direct materials Direct labour 5.0 millilitres 0.5 hours Standard Price or Rate $ 0.27 per millilitre $12.00 per hour Standard Cost $1.35 $6.00 During the most recent month, the following activity was recorded: a. 26,500 millilitres of material was purchased at a cost of $0.22 per millilitre. b. All of the material was used to produce 2,200 bottles of Clean-All. c. 600 hours of direct labour time was recorded at a total labour cost of $7,200. Assume that Instead of producing 2,200 bottles of Clean-All during the month, the company produced only 2,000 bottles, using 22,500 millilitres of material. (The rest of the material purchased remained in raw materials Inventory.) Required: Compute the direct materials price and quantity variances for the month. (Indicate the effect of each varlance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (l.e., zero varlance).) Materials price variance Materials quantity variance
The direct materials and direct labour standards for one bottle of Clean-All spray cleaner are given below: Standard Quantity or Hours Direct materials Direct labour 5.0 millilitres 0.5 hours Standard Price or Rate $ 0.27 per millilitre $12.00 per hour Standard Cost $1.35 $6.00 During the most recent month, the following activity was recorded: a. 26,500 millilitres of material was purchased at a cost of $0.22 per millilitre. b. All of the material was used to produce 2,200 bottles of Clean-All. c. 600 hours of direct labour time was recorded at a total labour cost of $7,200. Assume that Instead of producing 2,200 bottles of Clean-All during the month, the company produced only 2,000 bottles, using 22,500 millilitres of material. (The rest of the material purchased remained in raw materials Inventory.) Required: Compute the direct materials price and quantity variances for the month. (Indicate the effect of each varlance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (l.e., zero varlance).) Materials price variance Materials quantity variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:The direct materials and direct labour standards for one bottle of Clean-All spray cleaner are given below:
Standard Quantity
or Hours
Direct materials
Direct labour
5.0 millilitres
0.5 hours
Standard Price
or Rate
$ 0.27 per millilitre
$12.00 per hour
Standard
Cost
$1.35
$6.00
During the most recent month, the following activity was recorded:
a. 26,500 millilitres of material was purchased at a cost of $0.22 per millilitre.
b. All of the material was used to produce 2,200 bottles of Clean-All.
c. 600 hours of direct labour time was recorded at a total labour cost of $7,200.
Assume that Instead of producing 2,200 bottles of Clean-All during the month, the company produced only 2,000 bottles, using
22,500 millilitres of material. (The rest of the material purchased remained in raw materials Inventory.)
Required:
Compute the direct materials price and quantity variances for the month. (Indicate the effect of each varlance by selecting "F" for
favourable, "U" for unfavourable, and "None" for no effect (l.e., zero varlance).)
Materials price variance
Materials quantity variance
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