Megham Company Manufactures a Single Product During May,the Following Actual Activities Occurred: Material Purchased,12,000 Pounds for Developed

question 99

Essay

Megham Company manufactures a single product.The following standards have been developed for it: $$\begin{array} { | l | r | r | } \hline \text { Direct Material } & 6 \text { pounds } & \$ 4 \text { pound } \\\hline \text { Direct Labor } & 2 \text { hours } & \$ 15 \text { hour } \\\hline\end{array}$$
During May,the following actual activities occurred: Material purchased,12,000 pounds for $45,600;material used in the production of 2,000 units of product,13,000 pounds;direct labor,3,500 hours costing $56,000.Required:
(1)Compute the following variances:
(a)material quantity variance.(b)labor rate variance.(c)labor efficiency variance.(2)Give one possible explanation for each of the 3 variances computed.

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Policymaking Process

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Policymaking Process

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