Question 4 VARIANCE ANALYSIS Disco Limited manufactures two electronic components (X and Y) in one of its factories. Titanium is one of several materials used in the manufacture of both components. Disco Ltd uses standard and normal costing. The standard direct labour hours per unit of production and budgeted production quantities for a 13- week period are displayed in Exhibit 1. Exhibit 1 Standard direct labour hours and budgeted production for electronic components

Standard direct labour hours Budgeted d production quantities for 13-week period

x	0.40	28,000 units
Y	0.50	20,000 units

The standard wage rate for all direct workers was $16 per hour. Throughout the 13week period 39 direct workers were employed, each working a standard 40-hour week. Budgeted manufacturing overhead for the 13-week period was $278,400 and it was allocated to products on the basis of units produced. Actual production information for the 13-week period is displayed in Exhibit 2 Exhibit2: Actual production data for 13-week period Production Component X :27,000 units Component Y :22,000 units Direct wages paid $333,420

Titanium purchases (and usage) 47000 kilograms $851,100

Titanium price variance $6,650F

Manufacturing overhead $282,000 Required: (a) Calculate the flexible budget direct labour variances for the period in as much detail as possible. (b) Calculate the standard purchase price/kilogram for titanium for the period. (c) Calculate the under-/over-allocated manufacturing overhead for the period. (d) Provide the journal entry to write off the direct labour variances, the purchase price variance and the under-/over-allocated overhead from their respective accounts to Cost of Goods Sold (COGS).