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Unformatted text preview: QUESTION 1 ( 16 marks ) The Hartley Co. uses a standard cost system based on the following standard cost for each unit of output: Materials 2 Kg. of Q at $4.00 per Kg $ 8.00 Labour 5 hours at $10.00 per hour 50.00 $58.00 You are given the following information for the month of October 2010: Inventories, Oct. 1 : WIP (100% materials, 40% processed) 20,000 units Finished goods 0 units Direct materials 12,000 kg Inventories, Oct. 31: WIP (100% materials, 70% processed) 35,000 units Finished goods 0 units Direct materials 15,000 kg Production of finished units during October : 65,000 units Materials: Purchased 171,000 kilograms of Q @ $4.05 per kilogram. Used 168,000 Kg. Labour: 423,300 hours worked @ $11.00 per hour. REQUIRED: A. Calculate price(rate) and efficiency (quantity) variances for both materials and labour. Show your calculations and label the variances as favourable or unfavourable....
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- Fall '10