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mt tasks 1 & 2 pending X FNSACC613 Q5-6.pdf mloads/FNSACC613%20Q5-6.pdf The Gibbs Company makes and sells a single product. It uses a standard costing system in its operations. Budgeted production for September 2014 is 10,000 units. The standard cost per finished unit is as follows: 2 metres 3 hours @ $36 per meter @ $30 per hour $72.00 $90.00 Direct Materials: Direct Labour: Factory Overhead: - Variable - Fixed 3 hours 3 hours @ $4 per D.L. Hr @ $8 per D.L.HR $12.00 $24.00 $36.00 The management accountant has prepared the following statement for September Actual Production Units Direct Labour Hours Worked Direct Material Purchased (metres) Direct Material Used (metres) 9,000 27,500 18.400 18,200 Costs incurred: Direct Material Purchased (18,400 x $35) Direct Labour (27,500 x 29) Factory Overhead 644,000 $797,500 $321,600 The material price variance is identified at time of purchase. Required: (a) Calculate seven variances covering material, labour and overhead. (b) Your manager is worried about the integrity of current costing system. What might be the possible reasons for these variances? (C) Keeping in mind the principles of double entry bookkeeping & accrual based accounting prepare journal entries to record the material and labour variances. mt tasks 1 & 2 pending X FNSACC613 Q5-6.pdf mloads/FNSACC613%20Q5-6.pdf The Gibbs Company makes and sells a single product. It uses a standard costing system in its operations. Budgeted production for September 2014 is 10,000 units. The standard cost per finished unit is as follows: 2 metres 3 hours @ $36 per meter @ $30 per hour $72.00 $90.00 Direct Materials: Direct Labour: Factory Overhead: - Variable - Fixed 3 hours 3 hours @ $4 per D.L. Hr @ $8 per D.L.HR $12.00 $24.00 $36.00 The management accountant has prepared the following statement for September Actual Production Units Direct Labour Hours Worked Direct Material Purchased (metres) Direct Material Used (metres) 9,000 27,500 18.400 18,200 Costs incurred: Direct Material Purchased (18,400 x $35) Direct Labour (27,500 x 29) Factory Overhead 644,000 $797,500 $321,600 The material price variance is identified at time of purchase. Required: (a) Calculate seven variances covering material, labour and overhead. (b) Your manager is worried about the integrity of current costing system. What might be the possible reasons for these variances? (C) Keeping in mind the principles of double entry bookkeeping & accrual based accounting prepare journal entries to record the material and labour variances

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