Question

In: Accounting

You have been given the following per unit information about the production of Gillian Inc., and...

You have been given the following per unit information about the production of Gillian Inc., and are asked to provide the plant manager with information for a meeting with the vice-president of operations:

Standard
Quantity		 Standard
Price		 Actual
Quantity		 Actual
Price
Direct materials 5 kg $3 / kg 5.5 kg $2.80 / kg
Direct labour 1.5 hours $18 / hour 1.0 hours $16 / hour

Production data, both budgeted and actual, for the year are as follows:

Description Amount
Actual production (units)      40,000
Actual materials purchased and used (kg) 220,000

The plant manager has asked you to calculate the following variances: direct material price variance, direct material usage variance, direct labour rate variance, and the direct labour efficiency variance. Use your work to answer the following questions.

The total direct material price variance is $_______________.

The direct material price variance is

a)

Favourable

b)

Unfavourable

c)

Neither favourable or unfavourable

The total direct material usage variance is $_______________.

The direct material usage variance is

a)

Unfavourable

b)

Neither favourable or unfavourable

c)

Favourable

The total labour rate variance is $_______________.

The direct labour rate variance is

a)

Unfavourable

b)

Favourable

c)

Neither favourable or unfavourable

The total labour efficiency variance is $_______________.

The direct labour efficiency variance is

a)

Neither favourable or unfavourable

b)

Favourable

c)

Unfavourable

Solutions

Expert Solution

Answer to the above question is shown.

ekkarill92 answered 2 years ago
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