As summarized below, the body department of the High Power International’s Sydney SUV production facility established the following standard costs for aluminum for December 2021:

	Standard Amount per output unit	Standard Price per input unit
Direct Material	14.5 m2 (per unit)	$124 (per m2)
Direct Labour	132 minutes (per unit)	$35.00 (per hr)

During December 2021:

• 8,350 units were produced.
• The actual direct labor hours worked was 18,230 hours at a cost of $647,195 to the firm.
• 126,085 m² of aluminium was purchased and used to meet production requirements and the cost of this aluminium was $15,445,413.

• Required:

• Use Excel to calculate the:
  1. Direct Material Price (Rate) variance,
  2. Direct Material Quantity (Usage/Efficiency) variance, and
  3. Total Direct Material variance for the month of December.
• Use Excel to calculate the:
  1. Direct Labour Price (Rate) variance,
  2. Direct Labour Efficiency variance, and
  3. Total Direct Labour variance for the month of December.
• Include a cover letter (1 page) that discusses your results (relevant comparative charts/figures developed through Excel should be included), the implications of your results including the potential reasons for any favorable or unfavorable variances.

• This question has been designed to develop and test your capacity to design and work with spreadsheet applications which are a critical tool in all forms of accounting practice, but particularly management accounting. Marks are awarded for the simplicity and effectiveness of spreadsheet design as well as the accuracy of your answer.

Answer rating: 100% (QA)

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