FHFL Ltd operates a standard costing system for its single product. An extract of the standard cost card is shown below:

Standard Quantity  Standard Price/Rate   Standard Cost

Raw materials:  1.1 metres. $15.00 per metre $16.50

Direct labour : 0.8 hours $9.50 per hour $7.60

Total : $24.10

The actual experience for the current year is as follow:

Raw material purchased (15,000 metres at $13.00 per metre): $195,000

Raw materials used: 12,000 metres

Direct labour costs (10,200 hours at $10 per hour): $102,000

Units produced: 12,600 units

Required:

(a)

Calculate the raw materials price variance and materials usage variance, indicating a favourable or unfavourable variance.

(b)

Give ONE (1) possible reason for each the variances computed in (a).

(c)

Calculate the labour rate variance and labour efficiency variance, indicating a

favourable or unfavourable variance.

(d)

Give ONE (1) possible reason for each of the variances computed in (c).

Answer rating: 100% (QA)

a Raw Materials Variances Raw materials price variance AQAP SP 120001300 1500 24000 unfavourable Raw ... View the full answer