Concept explainers
(a)
Concept introduction:
Total cost:
It includes all the coststhat are incurred manufacturing a product. It can further be classified as variable costs, fixed costs and mixed costs.
The total cost of purchases for October.
(b)
Concept introduction:
Price variance:
It is the difference between price per unit in standard and actual price of product and multiplying that with quantity purchased in actual.
To compute:
The direct materials price variance based on quantity purchased.
(c)
Concept introduction:
Quantity variance:
It is referred to the amount which is computed by multiplying the standard price per unit with the difference between quantity in actual term and standard term of product.
To compute:
The direct materials quantity variance based on quantity used.
(d)
Concept introduction:
Rate variance:
It is referred to the amount which is computed by multiplying the number of actual hours with the difference between actual rate and standard rate per hour of direct labour.
To compute:
The standard direct labour rate for October.
(e)
Concept introduction:
Efficiency variance:
It is referred to the amount which is computed by multiplying the standard rate per hours with the difference between the number of actual hours and standard hours of direct labour.
To compute:
The direct labour efficiency variance for October.
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Chapter 9 Solutions
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