Maurice Tutor

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    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 10 Sep 2017 My Price 10.00

budgeted production quantities

Question Two

 

A company manufactures two components in one of its factories. Material A is one of several materials used in the manufacture of both components.

 

The standard direct labour hours per unit of production and budgeted production quantities for a 13-week period were:

 

Standard Budgeted

 

Direct labour hours productionquantities

 

Component X 0.40 hours 36 000 units

 

Component Y 0.56 hours 22 000 units

 

The standard wage rate for all direct workers was Sh.500.00 per hour.

 

Throughout the 13-week period 53 direct workers were employed, working a standard 40-hour week.

 

The following actual information for the 13-week period is available:

 

Production:

 

Component X, 35 000 units

 

Component Y, 25 000 units

 

Direct wages paid, Sh13,850,000

 

Material A purchases, 47 000 kilos costing Sh85 110

 

Material A price variance, Sh430 F

 

Material A usage (component X), 33 426 kilos

 

Material A usage variance (component X), Sh320.32 A

 

Required:

 

a) Calculate the direct labour variances for the period; (5 marks)

 

b) Calculate the standard purchase price for material A for the period and the standard usage of material A per unit of production of component X. (8 marks)

Describe the steps, and information, required to establish the material purchase quantity budget for material A for a period. (7 marks

Answers

Maurice Tutor
(5)
Status NEW Posted 10 Sep 2017 04:09 PM My Price 10.00

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