Reference no: EM133100419

Question - Half moon Manufactures fibreglass paddleboards. The standard cost of direct materials and direct manufacturing labour is $126.8 per board. This includes 20 kilograms of direct materials, at the budgeted price of $4 per kilogram, and 4 hours of direct manufacturing labour, at the budgeted rate of $11.70 per hour. Following are additional data for the month of July.

Data available:

Units completed 6,300 Units

Direct Material Purchases 200,000 Kilograms

Cost of direct material purchase 340,000

Actual direct manufacturing labour hours 31,000 hours

Actual direct labour cost 347,200

Direct materials efficiency variance 12,000 U

Required -

1. Compute direct manufacturing labour variances for July. Label each variance as favourable (F) or unfavourable (U) Rate variance, Efficiency Variance, Flexaible-Budget variance

2. Compute the actual number of kilograms of direct materials used in production in July.

Begin by computing the number of kilograms represented by the direct materials efficiency variance. Determine the formula, and then complete the computation

3. Calculate the actual price per kilograms of direct materials purchased. Determine the formula, and then complete the computation.

4. Calculate the direct materials rate variance.