1. During October, Natuzzi Ltd produced 3,900 turbines, and the accounting records indicated the following actual data: 
2. Direct material purchased 10,000 kilograms @$4.70 per kilogram 
3. Direct material used 9,550 kilograms 
4. Direct labour 15,100 hours @ $20 per hour 
5. The turbine has the following standard prime costs: 
6. Direct material: 2.5 kilograms @$4.50 per kilogram $ 11.25 
7. Direct labour hours: 4 hours @$19 per hour $ 76.00 
8. Standard prime cost per unit $ 87.25 
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10. REQUIRED: 
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12. a) For the month of October, calculate the following variances, indicating whether each is favourable or unfavourable: 
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14. i) Direct material price variance (calculated at time of purchase).
15. ii) Direct material quantity/efficiency variance. 
16. iii) Direct labour rate variance. 
17. iv) Direct labour efficiency variance. 
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19. b) Based on the answers to the above, suggest TWO possible reasons for the materials price variance and TWO possible reasons for the labour efficiency variance.

Answer rating: 100% (QA)

a Calculation of variances i Direct material price variance calculated at the time of purchase Actual quantity of direct material purchased 10000 kilo... View the full answer