Reference no: EM132571412

The Monroe Corporation manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labor:

Direct materials: 10 lb. at Rs. 4.50 per lb. Rs 45.00

Direct Manufacturing labor: 0.5 hour at Rs 30 per hour 15.00

The number of finished units budgeted for January 2020 was 10,000; 9,850 units were actually produced.

Actual results in January 2020 were as follows;

Direct Materials; 98,055 lb. used

Direct manufacturing labor: 4,900 hours Rs. 154,350

Assume that there was no beginning inventory of either direct materials or finished units.

During the month, materials purchased amounted to 100,000 lb., at a total cost of Rs. 465,000.

Input price variances are isolated upon purchase. Input-efficiency variances are isolated at the time of usage.

Required

Question i. Compute the January 2020 price and efficiency variances of direct materials and direct manufacturing labor.

Question ii. Prepare jounal entries to record the variance in requirement 1.

Question iii Comment on the January 2020 price and efficiency variances of Monroe Corporation.

Question iv Why might Monroe Calculate direct materials rice variances and direct materials efficiency variances with reference to different points in time?