Reference no: EM133187821
Question - Brier Company, manufacturer of car seat covers, provided the following standard costs for its product:
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Inputs
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Standard Quantity
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Standard Cost
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Standard Cost Per Unit
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Direct Material
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7.1 pounds
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5 per pound
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35.50
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Direct labour
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0.8 hours
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17 per hour
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13.60
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Variable Overhead
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0.8 hours
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7 per hour
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5.60
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The company reported the following in 2022 May:
Original budgeted output 4 700 units
Actual output 4 500 units
Actual direct labour hours 3 610 hours
Actual cost of direct labour $65 341
Purchases of raw materials 36 500 pounds
Actual price paid for raw materials $186 150
Raw materials used 34 150 pounds
Actual variable overhead cost $24 909
Variable overhead is applied on the basis of direct labour hours.
A. Compute the following:
i. Direct materials quantity variance
ii. Direct materials price variance
iii. Direct materials total variance
iv. Direct labour efficiency variance
v. Direct labour rate variance
vi. Direct labour total variance
vii. Variable overhead efficiency variance
viii. Variable overhead rate variance
B. State TWO (2) benefits of standard costing.
C. What are TWO (2) limitations of standard costing?