Damak Holdings produces a special box called Max. The company has recently created a standard cost...

Transcribed Image Text:

Damak Holdings produces a special box called Max. The company has recently created a standard cost system to help control costs and has established the following standards for Max box: Direct materials; 6 kg per box at RM 10.50 per kg Direct labour: 3.3 hours per box at RM 31 per hour During July, the company produced 3,000 Max. The box's production data for the month as follows: Direct materials purchased: 25,000 kg @ RM 10.20 per kg Direct materials balance: 5,000 of kg. Direct labour hours worked: 4,000 direct labour hours @ RM 288,000. i. Compute the material price variance for July. ii. Compute the material quantity variance for July. iii. Prepare a brief explanation of the possible causes of each variance. Damak Holdings produces a special box called Max. The company has recently created a standard cost system to help control costs and has established the following standards for Max box: Direct materials; 6 kg per box at RM 10.50 per kg Direct labour: 3.3 hours per box at RM 31 per hour During July, the company produced 3,000 Max. The box's production data for the month as follows: Direct materials purchased: 25,000 kg @ RM 10.20 per kg Direct materials balance: 5,000 of kg. Direct labour hours worked: 4,000 direct labour hours @ RM 288,000. i. Compute the material price variance for July. ii. Compute the material quantity variance for July. iii. Prepare a brief explanation of the possible causes of each variance.

Answer rating: 100% (QA)

i Material price variance Standard priceactual ... View the full answer