Reference no: EM132465986

PART B :STRUCTURED QUESTIONS

QUESTION 1

XYZ Manufacturing company has been producing cheese for the local market over the last 20 years. The details of the product costing for the production of 10,000 kilograms cheese are based on the followings:

Cost Components Standard Actual

Direct Materials RM14.00 RM13.50

Quantity utilized 7,500 litres 7,000 litres

Labour rate RM4.00/hour RM4.40/hour

Labour hours 1,000 hours 950 hours

Calculate the following variances and indicate whether the variance is favorable (F) or unfavorable (U).

(a) Direct materials price variance

(b) Direct materials quantity variance

(c) Direct labour time variance

(d) Direct labour rate variance

QUESTION 2

ABA Manufacturing Sdn. Bhd. produces pineapple and guava juice. Followings are data captured from the company static production budget published on 1 January 2018 based on 60,000 units production output.

Standard Cost Per Unit:

Direct materials. 2.5 kgs @ RM2.50/kg RM6.25

Direct labour. 30 minutes @ RM2.80/hour RM1.40

Until 31 December 2018, the company produced 65,000 units output. The actual data collected on 1 January 2019 shows that:

Actual Cost:

Direct materials. 175,000 kgs @ RM2.45/kg. RM428,750

Direct labour. 33,500 hours @ RM2.65/hour RM88,775

Calculate the following variances and indicate whether the variance is favorable (F) or unfavorable (U).

a) Direct materials price variance

b) Direct materials quantity variance

c) Direct labour rate variance

d) Direct labour time variance