Prabanga Metal Works (PMW) manufactures garage roller-doors. The manufacture of a roller- door requires the following:...
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Prabanga Metal Works (PMW) manufactures garage roller-doors. The manufacture of a roller- door requires the following: Direct materials standard Direct labour standard During June PMW made 1,500 roller-doors. The purchasing manager through buying from a new supplier was able to purchase 16,000 square metres of sheet metal for $78,400. All 16,000 square metres were used in June's production. Direct labour totalled 7,600 hours for $79,800. Required a. b. 10 square meters of sheet metal at $5 per metre 5 hours at $10 Calculate the following variances for June and indicated whether they are favourable or unfavourable: i. ii. iii. iv. Direct material price variance, Direct material quantity variance, Direct labour rate variance, Direct labour efficiency variance, For each of the above four variances separately describe possible events that may have caused the variance Prabanga Metal Works (PMW) manufactures garage roller-doors. The manufacture of a roller- door requires the following: Direct materials standard Direct labour standard During June PMW made 1,500 roller-doors. The purchasing manager through buying from a new supplier was able to purchase 16,000 square metres of sheet metal for $78,400. All 16,000 square metres were used in June's production. Direct labour totalled 7,600 hours for $79,800. Required a. b. 10 square meters of sheet metal at $5 per metre 5 hours at $10 Calculate the following variances for June and indicated whether they are favourable or unfavourable: i. ii. iii. iv. Direct material price variance, Direct material quantity variance, Direct labour rate variance, Direct labour efficiency variance, For each of the above four variances separately describe possible events that may have caused the variance
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To calculate the variances we need to compare the actual costs with the standard costs Lets calculate each variance and determine whether they are fav... View the full answer
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