Calibri Garden produces and sells manufactures terracotta pots in one size but different colour and design. Each pot requires the same amount of resources. Calibri provides you the static budget for 2020:

Expected production and sales		6,400	units
Direct materials		96,000	kg
Direct manufacturing labour		32,000	hours
Total fixed cost		$150,000

The information about direct materials and direct manufacturing labor is as follows:

			STANDARD QUANTITY		STANDARD PRICE
Direct materials			1.5	kilograms	$2.50	per kg
Direct manufacturing labor			0.5	hour	$25	per hour

In 2020 Calibri Garden produced and sold 70 000 units of terracotta pots. The direct materials cost spent was $282 975, on 115 500 kg purchased. During 2020 direct labour hours used were 42 000, with the total of direct manufacturing labor costs spent were $903 000. Actual fixed costs were $170 000, and there was no beginning or ending inventories.

5. Calculate price and efficiency variances for direct manufacturing labour. 

Answer rating: 100% (QA)

SOLUTION Direct Material Price Variance Standard Price Actual Quant... View the full answer