The company for which you are the accountant manufactures three related, but different, products. These are dishwashers,

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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).

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