The company for which you are the accountant manufactures three related, but different, products. These are dishwashers, washing machines and refrigerators. Each product has a standard time per unit of production. These are:

You are required to:

(a) Explain the term ‘standard hour’

(b) Calculate the standard hours produced in the month of March

(c) Calculate the following variances, using the above data:

(i) Total direct labour variance

(ii) Direct labour rate variance

(iii) Direct labour efficiency variance

(d) Give two possible causes for each of the labour rate and efficiency variances in (c).

Transcribed Image Text:

dishwashers washing machines refrigerators In the month of March the actual production was: dishwashers washing machines refrigerators and the labour details were: actual hours worked standard hourly rate of pay actual wages incurred 10 hours 12 hours 14 hours 150 100 90 4,100 £4 £18,450