The Following Data for the Alma Company Pertain to the Production

question 127

Essay

The following data for the Alma Company pertain to the production of 1,000 urns during August.
Direct Materials (all materials purchased were used):
Standard cost: $6.00 per kilogram.
Total actual cost: $5,600.
Standard cost allowed for units produced was $6,000.
Materials efficiency variance was $120 unfavourable.
Direct Manufacturing Labour:
Standard cost is 2 urns per hour at $24.00 per hour.
Actual cost per hour was $24.50.
Labour efficiency variance was $336 favourable.
Required:
a. What is standard direct material cost and quantity per urn?
b. What is the direct material price variance?
c. What is the total actual cost of direct manufacturing labour?
d. What is the labour price variance for direct manufacturing labour?

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Definitions:

LIFO Method

An accounting method that records the last items added to inventory as the first items sold.

Ending Inventory

Refers to the value of goods available for sale at the end of an accounting period.

Tennis Rackets

Sporting equipment consisting of a handled frame with an open hoop across which a network of strings or catgut is stretched tightly, used to strike a tennis ball.

Inventory Turnover

A measure of how many times inventory is sold or used in a time period such as a year.