Exam 10: Standard Costs for Control: Direct Material and Direct Labour

Cultco Company Ltd has set the following direct material standards per unit of product: 2.5 kg @ $3.00 per kg;$7.50 per unit.During April,actual direct material purchased and used amounted to 8000 kg at a cost of $3.10 per kg.Actual production amounted to 3000 units.Determine Cultco's direct material price variance.

In which of the following circumstances would it be acceptable to record the material price variance at the time of usage of the materials?

A material price variance is shown by:

Legacy Company Ltd has determined that 1 unit of its product requires 1.5 hours of direct labour in the assembly department and 1 hour in the finishing department.Assemblers are paid $8.00 per hour and finishers are paid $9.00 per hour.Determine the standard labour cost of one unit.

Which of the following statements regarding variances is/are true? The actions that create a favourable direct material price variance: i.can result in an unfavourable direct material quantity variance ii.are likely to create an unfavourable direct labour rate variance iii.can result in an unfavourable direct labour efficiency variance

When material price variances are recognised at the time of material purchase,direct materials used are:

Twister Pty Ltd has set direct labour standards of 3 hours per unit and $5 per hour.During the month 2900 hours at a total cost of $17 400 were used to produce 1000 units.Determine the total direct labour variance.

Twister Pty Ltd has set direct labour standards of 3 hours per unit and $5 per hour.During the month 2900 hours at a total cost of $17 400 were used to produce 1000 units.Determine the direct labour efficiency variance.

When investigating variances,management are more likely to investigate those costs that are uncontrollable.

I Wear Optometry determined the following variances had occurred during the month of September: The company made 1600 pairs of eyeglasses during the month using 2000 direct labour hours.The standard wage rate per hour is $14.50.Determine the standard wages for September's output.

A firm's purchasing manager bought poor quality material at a large saving.Because of the lower quality of material,more scrap was produced and because of the extra labour hours required an additional employee had to be hired to assist in the cutting operation.Assuming only the facts given,what variance(s)would result?