US Company Kincaid Ltd

Essay

US company Kincaid Ltd.produces and sells leather wallets.In the current year,the company budgeted for the production and sale of 18 000 wallets;however,21 000 wallets were actually produced and sold.Each wallet has a standard requiring eight square inches of material at a cost of .20 per inch and 10 minutes of assembly time at a cost of $.15 per minute.Actual costs for the production of 21 000 wallets were $36 080 for materials (164 000 inches purchased and used @ $.22 per inch)and $36 000 for labour (225 000 minutes @ $.16 per minute).
Required: Compute each of the following variances.Indicate whether the variance is favourable (F)or unfavourable (U).
A. Direct materials price variance
B. Direct materials usage variance
Direct labour rate variance
D. Direct labour efficiency variance