Hansenko Company Manufactures 100-Kilogram Bags of Fertilizer That Have the Following

question 3

Essay

Hansenko Company manufactures 100-kilogram bags of fertilizer that have the following unit standard costs for direct materials and direct labour:
$\begin{array}{lr}\text { Direct materials }(100 \mathrm{~kg} @ \$ 1.00 \text { per kg) } & \$ 100.00 \\\text { Direct labour }(0.5 \text { hours at } \$ 24 \text { per hour) } & \underline{12.00} \\\text { Total standard direct cost per } 100 \mathrm{~kg} \text { bag } & \underline{\$ 112.00}\end{array}$
The following activities were recorded for October:
- 1,000 bags were manufactured.
- $95,000 \mathrm{~kg}$ of materials costing $\$ 76,000$ were purchased
- $102,500 \mathrm{~kg}$ of materials were used.
- $\$ 12,000$ was paid for 475 hours of direct labour. There were no beginning or ending work-in-process inventories.
a.Compute the direct materials variances.
b.Compute the direct labour variances.
c.Give possible reasons for the occurrence of each of the preceding variances.

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Definitions:

Electroencephalogram

A test that measures the electrical activity of the brain using small, flat metal discs attached to the scalp.

Physiological

Pertaining to the functions and processes within living organisms and their parts.

Behavioral

Relating to or concerned with the actions or activities of living organisms, often in response to environmental or psychological stimuli.

Multiple Measures

The use of various methods or instruments to collect data on the same variable.