Direct Material: 3kg x $125 per kg Direct labour: 0.25 hours x $135 per hr Variable overhead
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Question:
Direct Material: 3kg x $125 per kg
Direct labour: 0.25 hours x $135 per hr
Variable overhead 0.25 hours x $78 per hr
Fixed Overhead 0.25 hours x $190 per hr
The following information relates to the month of November:
Units produced and sold 5000
Materials purchased 19500kg ($2 496 000)
Beginning inventory of materials 0kg
Ending inventory of materials 5 100 kg
Direct labour 1300 hrs at $134 per hr
Variable overhead incurred $98750
Fixed overhead incurred 231250
Budgeted production for the period was 4500 units
Required:
Standard Material
Standard Labour
Actual Material
Actual Labour
- calculate the following variances, stating whether they are favourable (F) or unfavorable (U):
- The direct materials price variance
- The direct materials usage variance
- The direct materials cost variance
- The direct labour rate variance
- The direct labour efficiency variance
- Labour cost variance
- Using the direct materials variances calculated, outline the possible situations when a production manager may or may not be held responsible for a variance. Where you conclude that the production manager is not responsible, you should indicate the manager responsible for the variance and explain why.
- Compute the fixed production overhead volume variance and explain your result.
Related Book For
Horngrens Accounting
ISBN: 978-0134674681
12th edition
Authors: Tracie L. Miller nobles, Brenda L. Mattison, Ella Mae Matsumura
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