Question

Problem 12.51A a-e Montreal Inc, manufactures garden hoses for large stores. The standard costs for a dozen garden hoses are as follows: Direct materials 20 mx $2 per metre = $40 Direct labour 3.00 hours x $11 per hour = $33.00 During February, Montreal Inc. worked on three separate orders of garden hoses. Job cost records for the month disclose the following: Lot 4503 4504 4505 Units in Lot Materials Used 1,100 dozen 22,165 m 1,600 dozen 32,240 m 2,900 dozen 58,435 m Hours Worked 2,950 5,180 2,820 You have been able to gather the following information: 1. Montreal Inc. purchased 110,000 m of material during February at a cost of $231,000. The materials price variance is recorded when goods are purchased, and all inventories are carried at standard cost. 2. The payroll department reported that production employees were paid $11.50 per hour. 3. There was no beginning work in process. During February, lots 4503 and 4504 were completed, and all materials were issued for lot 4505, which was 60% complete in terms of labour. 4. Montreal Inc. applies fixed and variable overhead based on machine hours. Below are the results for Montreal Inc. for the month of February The normal activity in machine hours Flexible budget variable overhead per machine hour Actual variable overhead cost incurred Actual fixed overhead cost incurred Variable overhead cost applied to production Variable overhead efficiency variance (unfavourable) Fixed overhead budget variance (unfavourable) 39,200 $2.50 110,000 292,180 110,750 8,250 2,100 Calculate the following: The materials price, quantity, and total variances. Material price variance Material quantity variances Total material variance s