• Abenkwan Ltd., a manufacturing firm, operates a standard marginal costing system. It makes a single product, Nkwan, using a single raw material Abe.
• The standard costs relating to Nkwan have been calculated as follows:
•  
• Standard cost schedule –Nkwan
•                                                                                                                                     Per Unit
• Direct Material, Abe, 100 kg at ¢5 per kg                                                                  ¢500
• Direct Labour, 10 hours at ¢8 per hour                                                                          80
• Variable Production overhead, 10 hours at ¢2 per hour                                                 20
•                                                                                                                                       600 
• The standard selling price of a unit of Nkwan is ¢900 and Abenkwan Ltd. produces 1,020 units a month.
• During May 2018, 1,000 units of Nkwan were produced. Relevant details of this production are as follows:
•             
• Direct Material Abe 
•             90,000 kg costing ¢720,000 were bought and used.
•             Direct Labour
•             8,200 hours were worked during the month and total wages were ¢63,000.
•             Variable Production overhead 
•             The actual cost for the month was ¢25,000.
•             Inventories of the direct material Abe are valued at the standard price of ¢5 per kg.
•             Each Nkwan was sold for ¢975.
• Required:
•             Calculate the following variances for the month of May 2018:
• Total marginal production cost variance (ie. Total cost variance)     
• Direct material cost variance analysed into price and usage variances                                                                                                                                  
• Direct labour cost variance analysed into rate and efficiency variances                                                                                                                                
• Variable production overhead cost variance, analysed into expenditure and efficiency variances                                                                                    
• Selling price variance                                                                        

 Sales volume contribution variance                                                    

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1 a Direct material price ... View the full answer