Albert Manufacturing Company Manufactures a Single Product During the Month of October,6,000 Units Were Produced

question 166

Essay

Albert Manufacturing Company manufactures a single product.The standard cost of one unit of this product is:
$\begin{array}{|l|r|}\hline \text { Direct Materials: } 6 \text { metres at } \$ 1.50 & \$ 9.00 \\\hline \text { Direct Labour: } 1 \text { hour at } \$ 6.75 & \$ 6.75 \\\hline \text { Variable Overhead: } 1 \text { hour at } \$ 4.50 & \$ 4.50 \\\hline \text { Total Standard Variable Cost per Unit } & \$ 20.25 \\\hline\end{array}$
During the month of October,6,000 units were produced.Selected cost data relating to the month's production follow:
$\begin{array}{|l|r|}\hline \text { Materials Purcahsed: } 60,000 \text { metres at } \$ 1.43 & \$ 85,800 \\\hline \text { Material Used in Production: } 38,000 \text { metres } & \\\hline \text { Direct Labour: ? hours at } \$ ? \text { per hr } &\$ 41,925\\\hline \text { Variable Overhead Cost Incurred } & \$ 30,713 \\\hline \text { Variable Overhead Efficiency Variance } & \$ 2,250 \text { unfavourable } \\\hline\end{array}$
There was no beginning inventory of raw materials.The variable overhead rate is based on direct labour-hours.
Required:
a)(Appendix 10B)For direct materials,compute the price and quantity variances for the month,and prepare journal entries to record activity for the month.
b)(Appendix 10B)For direct labour,compute the rate and efficiency variances for the month,and prepare a journal entry to record labour activity for the month.
c)For variable overhead,compute the spending variance for the month,and prove the efficiency variance given above.

---

Definitions:

Deception

The act of misleading or falsely persuading others, often involving concealing the truth or providing incorrect information.

Random Assignment

A method used in experiments where participants are allocated to different groups in a way that every participant has an equal chance of being assigned to any group, ensuring variation across them.

Internal Validity

The extent to which the design and conduct of a study allow for the accurate determination of a causal relationship between variables, free from confounding factors.

Extraneous Variables

Any variable other than the independent variable that may affect the outcome of an experiment and should be controlled or accounted for.