Koulouraki Inc. is a gourmet cookie manufacturer. Cookies are sold by the kilogram for $10.65. Monthly production averages 200,000 kilograms. Each kilogram requires $1.75 of direct materials and 3 minutes of processing time at a cost of $20.50 per hour. In March 2014, Koulouraki reported the following actual results:
Required:
Units sold ................................... 225,000 kilograms
Total units produced ...................... 240,704 kilograms
Total direct materials ...................... $481,408
Total direct labour .......................... $224,964 for 10,415 hours
1. Calculate the materials price variance and materials usage variance for March.
2. Calculate the labour rate variance and labour efficiency variance for March.