1.3

REQUIRED

Use the information provided below to calculate the following variances. Each answer must indicate whether the variance is favourable or unfavourable.

1.3.1 Material quantity variance	(4 marks)
1.3.2 Labour rate variance	(4 marks)
1.3.3 Variable manufacturing overheads efficiency variance	(4 marks)

INFORMATION

The standard variable costs per unit (with a standard quantity of 25 000 units), set by Kidman Manufacturers, for Product M are as follows:

Materials	4 kg at R10 per kg
Labour	2 hours at R20 per hour
Variable overhead	2 hours at R12 per hour

The actual costs for October 2022 are as follows:

Materials	100 000 kg were purchased for R980 000
Materials	78 000 kg were used to produce 20 000 units of Product M
Labour	41 000 labour hours at R19.60 per hour
Variable overhead	R500 200 incurred.