RU Limited operates a system of standard costing in respect of one its products which is manufactured within a single cost centre.

The standard price of material is N$20 per litre. The standard wage rate is N$ 12 per hour and 5 hours are allowed to produce on unit Fixed production overhead is absorbed at the rate of 100% of wages cost.

During the month of September 2020 the following took place:

      N$

Actual price (paid for materials purchased)                19.50 per litre

Total direct wages cost                                               156 000

Fixed production overhead                                         158 000

Variances  

		N$
Type	Favour (F)	Unfavourable (U)
Direct material price	80 000
Direct material usage		5 000
Direct labour rate		5 760
Direct labour efficiency	2 760
Fixed production overhead expenditure		8 000

REQUIRED TO CALCULATE:

a) Budgeted output in units & raw materials purchased in litres?

b) What is the standard quantity allowed for production?

c) Actual units produced?

d) Actual hours worked?

e) Actual Wage rate per hour?

Answer rating: 100% (QA)

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