Jenneth Textile Sdn. Bhd. is Malaysia's leading manufacturer, supplier and exporter of round neck t-shirt and...

 

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Jenneth Textile Sdn. Bhd. is Malaysia's leading manufacturer, supplier and exporter of round neck t-shirt and jackets. The company plans to expand its business by manufacturing a new product which is children's trousers. The company has set the following standard for a pair of children of children's trousers: Linen cotton Direct labour Variable production overhead Fixed production overhead 1.5 meters at RM12 per meter 1.5 hours at RM6 per hour RM3 per direct labour hours RM9 per pair Production overhead cost is absorbed based on direct labour hours. The management of Jenneth Textile Sdn. Bhd. has estimated producing an average of 350 pairs of trousers per month. The following are the actual data collected in July 2023: Linen cotton- purchased and used Direct labour Variable production overhead Fixed production overhead Actual production 400 meters at RM4,200 450 hours at RM2,340 RM1,800 RM3,000 320 pairs (a) Required to calculate the following variances, indicating whether each is favourable (F) or unfavourable (UF): (a) Required to calculate the following variances, indicating whether each is favourable (F) or unfavourable (UF): i. Direct material price. ii. Direct material usage. iii. Direct labour rate. iv. Direct labour efficiency. v. Variable overhead expenditure. vi. Fixed overhead efficiency. vii. Fixed overhead efficiency. |||| (b) Briefly explain ONE (1) possible cause for favourable in direct material price and usage variances. Jenneth Textile Sdn. Bhd. is Malaysia's leading manufacturer, supplier and exporter of round neck t-shirt and jackets. The company plans to expand its business by manufacturing a new product which is children's trousers. The company has set the following standard for a pair of children of children's trousers: Linen cotton Direct labour Variable production overhead Fixed production overhead 1.5 meters at RM12 per meter 1.5 hours at RM6 per hour RM3 per direct labour hours RM9 per pair Production overhead cost is absorbed based on direct labour hours. The management of Jenneth Textile Sdn. Bhd. has estimated producing an average of 350 pairs of trousers per month. The following are the actual data collected in July 2023: Linen cotton- purchased and used Direct labour Variable production overhead Fixed production overhead Actual production 400 meters at RM4,200 450 hours at RM2,340 RM1,800 RM3,000 320 pairs (a) Required to calculate the following variances, indicating whether each is favourable (F) or unfavourable (UF): (a) Required to calculate the following variances, indicating whether each is favourable (F) or unfavourable (UF): i. Direct material price. ii. Direct material usage. iii. Direct labour rate. iv. Direct labour efficiency. v. Variable overhead expenditure. vi. Fixed overhead efficiency. vii. Fixed overhead efficiency. |||| (b) Briefly explain ONE (1) possible cause for favourable in direct material price and usage variances.

Answer rating: 100% (QA)

To calculate the variances in question we will be comparing the standard costs set by Jenneth Textile Sdn Bhd against the actual costs incurred in July 2023 Variances tell us the difference between wh... View the full answer