Question

Grand River Manufacturing produces a metal flange that it sells to several local home building supply retailers. The company has set standards as follows for materials and labour:
During the past month, the company purchased 1,500 kilograms of direct materials at a cost of $4,200. All of this material was used in the production of 840 units of product using 425 hours of direct labour. Direct labour cost totalled $4,675 for the month. The following variances have been computed:
Labour rate variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $425 U
Total labour variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 375 F
Materials quantity variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 75 U
Required:
1. For direct labour:
a. Compute the standard rate per hour for labour.
b. Compute the standard quantity allowed for labour for the month ’s production.
c. Compute the standard quantity of labour allowed per unit of product.
2. For direct materials:
a. Compute the actual direct materials cost per kilogram for the month.
b. Compute the materials price variance.


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  • CreatedJuly 08, 2015
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