Xavier Company produces a single product. Variable manufacturing overhead is applied to products on the basis of
Question:
Xavier Company produces a single product. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The standard costs for one unit of product are as follows: Direct material: 6 ounces at Rs.0.50 per ounce Rs. 3 Direct labor: 1.8 hours at Rs.10 per hour 18 During June, 2,000 units were produced. The costs associated with June’s operations were as follows: Material purchased 18,000 ounces at Rs 0.60 per ounce Rs 10,800 Material used in Production: 14,000 ounces Direct Labor: 4,000 hours at Rs 9.75 per hour Rs 39,000 Required: a) Compute the direct materials price variance (at the time of purchase & at the time of usage both) and direct material quantity variances. b) Compute direct labor rate variance and direct labor efficiency variance. Give general journal entry.
Business Statistics a decision making approach
ISBN: 978-0133021844
9th edition
Authors: David F. Groebner, Patrick W. Shannon, Phillip C. Fry