Drogheda Chemical adopts a continuous improvement approach to setting monthly standards' costs. Assume the direct materials standard

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Drogheda Chemical adopts a continuous improvement approach to setting monthly standards' costs. Assume the direct materials standard quantity input of 10 kg per output unit and the direct manufacturing labour quantity input of 0.5 hours per output unit pertain to January 2008. The standard amounts for February 2008 are 0.997 of the January standard amount. The standard amounts for March 2008 are 0.997 of the February standard amount. Assume the same information for March 2008 as in Exercise 15.18 except for these revised standard amounts.

Required

1. Calculate the March 2008 standard quantity input amounts per output unit for direct materials and direct manufacturing labour.

2. Calculate the March 2008 price and efficiency variances of direct materials and direct manufacturing labour.

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Management and Cost Accounting

ISBN: 978-1405888202

4th edition

Authors: Alnoor Bhimani, Charles T. Horngren, Srikant M. Datar, George Foster

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