# Question: Morro Bay Surfboards is a California company that manufactures fibreglass

Morro Bay Surfboards is a California company that manufactures fibreglass surf boards. The standard cost of direct materials and direct manufacturing labour is \$100 per board. This includes 20 pounds of direct materials, at the budgeted price of \$2 per pound, and 5 hours of direct manufacturing labour, at the budgeted rate of \$12 per hour. Following are additional data for the month of July:
Units completed ............... 6,000 units
Direct material purchases ............ 150,000 pounds
Cost of direct material purchases .......... \$292,500
Actual direct manufacturing labor-hours ...... 32,000 hours
Actual direct-labor cost ............ \$368,000
Direct materials efficiency variance ........ \$ 12,500 U
There were no beginning inventories.
REQUIRED
1. Compute direct manufacturing labour variances for July.
2. Compute the actual pounds of direct materials used in production in July.
3. Calculate the actual price per pound of direct materials purchased.
4. Calculate the direct materials price variance.

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