Baker Company Adopted a Standard Cost System Several Years Ago $10 \mathrm{~kg} @ \$ 4.50$

question 59

Essay

Baker Company adopted a standard cost system several years ago.The standard costs for the prime costs of its single product follow: Material: $10 \mathrm{~kg} @ \$ 4.50$ per kilogram $\quad$$\$ 45.00$
Labour: 6 hours $@ \$ 8.50$ per hour $\quad$$\quad$$\quad$$\$ 51.00$ The following operating data were taken from the records for December:
1.
Units completed:
5,800 units
2.
Budgeted output:
6,000 units
3.
Materials purchased:
60,000 kg
4.
Total actual labour costs:
$306,600
5.
Actual hours of labour:
36,500 hours
6.
Material usage variance:
$2,250 unfavourable
7.
Total material variance:
$450 unfavourable
Compute the following: A. Labour rate variance
B. Labour efficiency variance
C. Actual kilograms of material used in the production process
D. Actual cost paid per kilogram of material

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Definitions:

Share of Stock

A unit of ownership in a corporation that entitles the shareholder to a portion of the corporation's earnings and assets.

Share Value

The financial worth of a single share of a company's stock.

Dividend Policy

Dividend Policy is a company's strategy or guidelines used to decide how much of its earnings will be paid out to shareholders in the form of dividends.

Common Stock

This is a type of security that signifies ownership in a corporation and represents a claim on part of the company's profits.