Aaha Inc. produces premium protective automotive covers. The direct materials and direct labour standards for one car cover are as follows: Standard Quantity or Hours Direct materials Direct labour 7.00 metres of cloth 0.30 hours Standard Price or Rate $8 per metre $ 16 per hour Standard Cost $56.00 $4.80 In September, the following activity was recorded: 17,500 metres of cloth were purchased at a cost of $7.50 per metre All of the purchased material was used to produce 2,500 car covers. 520 direct labour-hours were recorded at a total labour cost of $8,320. Required: 1. Compute all direct materials variances for September (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (ie., zero variance).) Answer is complete and correct. Direct materials price variance Direct materials quantity variance Total direct material cost variance $ 8,750 F $ $ 8,750 ( 0 None F 000 2. Compute all direct labour cost variances for September (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (ie., zero variance).) Answer is complete but not entirely correct. 0 Direct labour rate variance Direct labour efficiency variance $ 630 Total direct labour cost variance S 630 000 None
Aaha Inc. produces premium protective automotive covers. The direct materials and direct labour standards for one car cover are as follows: Standard Quantity or Hours Direct materials Direct labour 7.00 metres of cloth 0.30 hours Standard Price or Rate $8 per metre $ 16 per hour Standard Cost $56.00 $4.80 In September, the following activity was recorded: 17,500 metres of cloth were purchased at a cost of $7.50 per metre All of the purchased material was used to produce 2,500 car covers. 520 direct labour-hours were recorded at a total labour cost of $8,320. Required: 1. Compute all direct materials variances for September (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (ie., zero variance).) Answer is complete and correct. Direct materials price variance Direct materials quantity variance Total direct material cost variance $ 8,750 F $ $ 8,750 ( 0 None F 000 2. Compute all direct labour cost variances for September (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (ie., zero variance).) Answer is complete but not entirely correct. 0 Direct labour rate variance Direct labour efficiency variance $ 630 Total direct labour cost variance S 630 000 None
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Aaha Inc. produces premium protective automotive covers. The direct materials and direct labour standards for one car cover are as
follows:
Standard Quantity
or Hours
Direct materials
Direct labour
7.00 metres of cloth
0.30 hours
Standard Price
or Rate
$8 per metre
$ 16 per hour
Standard
Cost
$56.00
$4.80
In September, the following activity was recorded:
17,500 metres of cloth were purchased at a cost of $7.50 per metre
All of the purchased material was used to produce 2,500 car covers.
520 direct labour-hours were recorded at a total labour cost of $8,320.
Required:
1. Compute all direct materials variances for September (Indicate the effect of each variance by selecting "F" for favourable, "U" for
unfavourable, and "None" for no effect (ie., zero variance).)
Answer is complete and correct.
Direct materials price variance
Direct materials quantity variance
Total direct material cost variance
$ 8,750
F
$
$ 8,750 (
0
None
F
000
Transcribed Image Text:2. Compute all direct labour cost variances for September (Indicate the effect of each variance by selecting "F" for favourable, "U"
for unfavourable, and "None" for no effect (ie., zero variance).)
Answer is complete but not entirely correct.
0
Direct labour rate variance
Direct labour efficiency variance
$ 630
Total direct labour cost variance
S 630
000
None
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