value: 10.00 points The direct materials and direct labour standards for one bot

Question

value: 10.00 points The direct materials and direct labour standards for one bottle of Clean-All spray cleaner are given below Standard Price or Rate Standar Cost $1.62 $3.60 Standard Quantity Direct materials Direct labour or Hours 6.0 millilitres 0.3 hours S 0.27 per millilitres $ 12.00 per hour During the most recent month, the following activity was recorded a. 21,000 millilitres of material was purchased at a cost of $0.22 per millilitre b. The company produced only 2,000 bottles, using 17,000 millilitres of material. (The rest of the material purchased remained in raw materials inventory.) c. 675 hours of direct labour time was recorded at a total labour cost of $8,100 Required: Compute the direct materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) 1,050 Materials price Materials quantity variance variance

Explanation / Answer

Direct Material Price Variance = (Standard Rate - Actual Rate) x Actual Quantity                                                              = ( 0.27 - 0.22) x 17000                                                              = 850 Fav Direct Material Quantity Variance = (Standard Quantity - Actual Quantity) x Standard Rate                                                              = ( 6 x 2000 - 17000) x 0.27                                                              = 1350 Unfav

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