Krait Products manufactures and sells camping lanterns. The company\'s Standard
ID: 2581693 • Letter: K
Question
Krait Products manufactures and sells camping lanterns. The company's Standard Cost Card is indicated below: Krait Products Inc. Standard Cost Card Standard Standard Quantity Price Standard or Hours or Rate 1.25 kg $8.80 11.00 2.5 hours $14.00 $ 35.00 .5 hours 3.00$ 7.50 Equations SP (AQ-Sa) AH (AR - SR) AQ (AP - SP) SR (AH SH) Inputs Cost Direct Materials Direct Labour Variable OH Total Standard Cost per Unit $53.50 Required - Use the data from the table above to perform the following calculations. Enter your response in the cell provided and circle whether the variance is Favourable (F) or Unfavourable (U) 1) During the month of November, Krait recorded that they used 3000 kg of materials which they bought for $25,500 What is Krait's Direct Material Price Variance for the month? Response 1: 2) If Krait produced 2000 lanterns during the month, what is their Direct Material Quantity Variance? Response 2: 3) Krait incurred Direct Labour costs of $74,250 and a total of 5400 hours. What would their Labour Rate Variance for the month be? Response 3:Explanation / Answer
1)
Standard Rate
21120
(3000 / 1.25 * 8.80 )
Actual Rate
25500
Direct Material Price Variance
4380
Unfavourable
(21120-25500)
2)
Standard Quantity
2500
(2000 * 1.25)
Actual Quantity
3000
Direct Material Quantity Variance
3520
Unfavourable
8.80/1.25(2500 - 3000 )
3)
Standard Labour Cost
30240
(5400 / 2.5 * 14.00)
Actual Rate
74250
Labour Rate Variance
44010
Unfavourable
(30240-74250)
4)
Standard Labour Hours
(2000 * 2.5)
5000
Actual Hours
5400
Labour Efficiency Variance
2240
Unfavourable
14/2.5 (5000 - 5400)
1)
Standard Rate
21120
(3000 / 1.25 * 8.80 )
Actual Rate
25500
Direct Material Price Variance
4380
Unfavourable
(21120-25500)
2)
Standard Quantity
2500
(2000 * 1.25)
Actual Quantity
3000
Direct Material Quantity Variance
3520
Unfavourable
8.80/1.25(2500 - 3000 )
3)
Standard Labour Cost
30240
(5400 / 2.5 * 14.00)
Actual Rate
74250
Labour Rate Variance
44010
Unfavourable
(30240-74250)
4)
Standard Labour Hours
(2000 * 2.5)
5000
Actual Hours
5400
Labour Efficiency Variance
2240
Unfavourable
14/2.5 (5000 - 5400)
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