In: Accounting
Arctic Gear Inc. manufactures jackets and other cold weather clothing. A popular high end ski parka requires the following:
Direct materials standard 2 square metres at $13.50 per metre
Direct manufacturing labour standard 1.5 hours at $20.00 per hour
During the third quarter, the company made 1,500 parkas and used 3,150 square metres of fabric costing $36,225. Direct labour totaled 2,100 hours for $47,250.
Required:
a. Compute the direct materials price and efficiency variances for the quarter.
b. Compute the direct manufacturing labour rate and efficiency variances for the quarter.