During March, Raining Unlimited Produced 5,500 Umbrellas from Nylon That

question 116

Essay

During March, Raining Unlimited produced 5,500 umbrellas from nylon that costs $0.45 per metre, which is $0.05 per metre cheaper than the standard cost. It also used 3,000 direct labour hours at a rate of $6.50 per hour. Its direct materials standard is 1 m per umbrella. Its direct labour standard is 0.5 hour per umbrella.Its materials usage variance was a favourable $500, and its labour rate variance was a favourable $900.
Required:
A. Calculate the actual quantity of materials.
B. Calculate the standard labour rate.
C. Determine the materials price variance and whether it is favourable or unfavourable.
D. Determine the labour efficiency variance and whether it is favourable or unfavourable.
E. Record the entries for the materials purchase, the issuance and usage of materials, and the labour variances.
F. Provide the closing entries, assuming all variances are immaterial.

---

Definitions:

Frozen Orange Juice

A type of commodity trading that involves frozen concentrated orange juice, often traded on futures markets.

Food Warehouse

A large storage facility used to store, manage, and distribute food products to retailers, wholesalers, or directly to consumers.

Inventory

The quantity of goods that a company holds for the purpose of future sale or use.

Direct Marketing

A method of marketing that involves direct communication with potential customers through various means, such as mail, email, or phone, without the intermediation of third parties.