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Question 23| Variance Analysis MACIT Limited manufactured 2,000 units during November 2023 of...

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Accounting

Question 23| Variance Analysis
MACIT Limited manufactured 2,000 units during November 2023 of a special irrigation tool used by
farmers in Jamaica. The irrigation tool has the following standard prime cost:
Direct material: 3 metres at $500 per metre..... $1,500
Direct labour: 10hrsat $250 per hr........... $2.500
Standard prime cost per unit ..................... $4,000
The actual results for MACIT Limited's special irrigation tool were as follows:
Direct material purchased
Direct material used
Direct labour
6,300 metres at $520 per metre
5,000 metres
23,200hrs at $225 per hr.
Task 23A Compute the Direct Material Variances for:
[4.5 Marks]
i. Price [2 marks]
ii. Usage [2.5 marks]
Task 23B
Compute the Direct Labour Variances for:
[4.5 Marks]
iii. Rate [2 marks]
iv. Efficiency [2.5 marks]
Task 23C
[1 mark]
List two reasons why companies adopt standard costing.
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