1. Calculate the total direct materials variance and total direct labour variance, together with their respective sub-variances.2. Show how he derived the percentages quoted in his statement Grainger Ltd makes sofa covers which are sold directly to the public via the company's website.The business has expanded over the last couple of years and has recently appointed you asmanagement accountant to replace Mark Arthurs, the retiring office manager. To help you on yourarrival, Mark Arthurs has supplied the following standard costing data, based on observations andfinancial records.Quantity of resourceCost per unit ofresource (£)Standard costper unit (£)Direct materials2028014 m² (square metres)10 hoursDirect Labour11.50115Total395Planned output for October (your first month in the post) had been 2,300 units, however, due tothe current trend for refurbishing existing furniture rather than replacing it, the actual output in themonth was 2,622 units. The month had, however, been challenging, with staff shortages beingplugged using agency staff and fabric is difficult to source due to supply chain issues.The report of actual costs incurred in October is as follows:Quantity of resourceTotal Cost (£)Direct materials38,019 m² (square metres)798,399Direct Labour31,464 hours373,635Total1,172,034In a meeting to discuss cost control in the period, Stuart Brown, the production manager, made thefollowing statement: "in preparing for this meeting I've done some calculations: output was 14%higher than planned but our cost per unit was only 13.2% higher than standard: what a fantasticjob the team's done in controlling our costs!"a)Calculate the total direct materials variance and total direct labour variance, togetherwith their respective sub-variances.b)Show how Stuart derived the percentages quoted in his statement and consider itsvalidity. Discuss whether or not you agree that costs have been well controlled in theperiod.

Name: 1. Calculate the total direct materials variance and total direct labo
Uploaded: 2024-03-20T06:33:06.000Z
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Description: 1. Calculate the total direct materials variance and total direct labour variance, together with their respective sub-variances.2. Show how he derived the percentages quoted in his statement Grainger Ltd makes sofa covers which are sold directly to t