The direct materials and direct labour standards for one bottle of Clean-All spray cleaner are given below: Standard Quantity or Hours Standard Price or Rate Direct materials Direct labour 5.0 0.5 millilitres hours Standard Cost $ $ 0.29 per millilitre 12.00 per hour During the most recent month, the following activity was recorded: a. 22,000 millilitres of material was purchased at a cost of $0.24 per millilitre. b. All of the material was used to produce 2,000 bottles of Clean-All. c. 725 hours of direct labour time was recorded at a total labour cost of $8,700. $ 1.45 $6.00 Assume that instead of producing 2,400 bottles of Clean-All during the month, the company produced only 2,000 bottles, using 18,000 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 variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

The direct materials and direct labour standards for one bottle of Clean-All spray cleaner are given below: Standard Quantity or Hours Standard Price or Rate Direct materials Direct labour 5.0 0.5 millilitres hours Standard Cost $ $ 0.29 per millilitre 12.00 per hour During the most recent month, the following activity was recorded: a. 22,000 millilitres of material was purchased at a cost of $0.24 per millilitre. b. All of the material was used to produce 2,000 bottles of Clean-All. c. 725 hours of direct labour time was recorded at a total labour cost of $8,700. $ 1.45 $6.00 Assume that instead of producing 2,400 bottles of Clean-All during the month, the company produced only 2,000 bottles, using 18,000 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 variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

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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