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:

Mainstream Economics

This term describes the body of economic thought considered dominant in the academic discipline; it focuses on the use of mathematical models to describe economic processes.

Social Movement Unionism

A labor union strategy that combines traditional union organizing with broader social and political activism, often aligning with various social movements.

New Public Management

An approach to running public sector organizations that is inspired by private sector management techniques, focusing on efficiency, performance measurement, and the use of market mechanisms.

Undue Emphasis

Placing an excessive or disproportionate level of importance on a particular aspect, often leading to imbalance or distortion.