CHAPTER 10 Standard Costing - Variance Analysis 173 QUESTION 2 MLO Ltd operates a variance accounting system, calculating material price variance on receive of materials into stock. The monthly budget is to make and sell 1,600 units of a single product which has the following standard unit cost details: Direct material SQ 11.50 kg SH SP 4 per kg 46 SR Direct labour 4 hours 5 per hour 20 SH VOAR Variable overhead 4 hours 2 8 SH FOAR Fixed overhead 4 hours 6.50 26 Total production cost 100 The following actual data was recorded for the last monthly accounting period: Units produced Materials purchased - 1,670 - Materials used Direct labour Actual variable overheads - Actual fixed overheads - 24,000 kg, costing 92,400 19,850 kg 6,590 hours, costing 34,268 12,920 44,580 REQUIRED Calculate the following variances for last month: (a) Material price (b) Material usage (c) Material cost (d) Direct labour cost (e) Direct labour rate (f) Direct labour efficiency. (g) Variable overhead cost (h) Variable overhead expenditure (i) Variable overhead efficiency (j) Fixed overhead cost (k) Fixed overhead expenditure (1) Fixed overhead volume (Total 20 marks) (LCCI Series 4: 1994)