Reference no: EM132713475
Question - Langille Industries employs a standard cost system. Langille has established the following standards for the prime costs of its Target Brand product line.
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Standard Quantity
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Standard Price
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Standard Cost
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Direct Materials
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8 kg
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$1.80/kg
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$14.40
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Direct Labour
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0.25 DLH
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$8.00/DLH
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2.00
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$16.40
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During November, Langille purchased 160,000 kg of direct materials at a total cost of $304,000. The total factory wages for November were $42,000, 90% of which were for direct labour. Langille manufactured 19,000 Target Brand during November, using 142,500 kg of direct materials and 5,000 direct labour hours.
Required -
a) What was the direct materials purchase price variance for November?
b) What was the direct materials quantity variance for November?
c) What was the direct labour rate variance for November?
d) What was the direct labour efficiency variance for November?
e) Over the past year, Langille' management team attempted to reduce the number of customer complaints relating to the product by sourcing higher-quality direct materials from a different supplier. What effect has this had on direct materials costs? Do you recommend that they continue the practice?