| University | Republic Polytechnic (RP) |
| Subject | B2090C Management Accounting Assignment |
Question 1 (11 marks)
Darwin Pte Ltd (“Darwin”) produces a high-end food processor called the Waze.
The table below shows the direct labour standard cost to produce one unit of the Waze.
| Standard Cost | Description |
| Direct labour | 1.5 hours at $8 per hour |
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During January, 2,500 units of the Waze were produced, and the actual direct labour costs were as follows:
| Actual Cost | Description |
| Direct labour | 2,000 hours at $12 per hour |
a. Determine the values for (i) and (ii) in the template below. Show all your workings clearly where required.
Table 1: Template
| Description | Flexible Budget | |
| Standard rate | Standard Hours
Adjusted to Actual Output |
|
| Direct labour | (i) | (ii) |
b) Compute the direct labour rate and efficiency variances and indicate if each variance is “Favourable” or “Unfavourable”.
c) Identify one (1) possible cause for the direct labour efficiency variance calculated in part (b).
d) Marks will be awarded for Oral Questioning for this section. Please see marking criteria below.
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