Amo-Kye Chemicals Ltd. has projected to produce and sell 500 kegs of its commercial cleaner at GHS792 per keg.

In November 2020, the company produced and sold 510 kegs of the cleaner as follows:

GHS

Sales 401,148

Materials consumed:

C 51,600kg 81,180

D 101,500kg 204,970

5,000 hours of Labour used 36,234

The following were the standard direct costs per keg of the cleaner:

Materials:

C 100kg @ GHS1.584

D 200kg @ GHS 1.980

10 hours of Labour @ GHS7.128

Required:

1. Compute the
   1. price and usage variances for each material
   2. wages rate and efficiency variances
   3. sales price and volume variances. (8 marks)
2. Comment briefly (Favourable or Adverse) upon the information revealed by each of the variances you have computed. (2 marks)

Answer rating: 100% (QA)

Material C Standard price SP GHS 1584 Standard quantity per Keg 100 kg Standard quantity for 510 Keg... View the full answer