Courtier Limited's standard cost information is given below Direct materials Direct labour Variable overheads Fixed overheads 40 kgs at...

  

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Courtier Limited's standard cost information is given below Direct materials Direct labour Variable overheads Fixed overheads 40 kgs at $73.00 per kg 17 hours at $250.00 per hour 2,920.00 4,250.00 2,720.00 2,380.00 12,270.00 Direct materials 3,500,000 kgs costing $210,000,000 Direct labour 1,365,000 hours costing $273,000,000 Variable overheads costing $204,750,000 Fixed overheads costing $221,000,000 The budgeted output is 70,000 units Overheads are absorbed on the basis of direct labour hours The actual output, costs and usage of resources are outlined below; Actual output is 80,000 units (a) b) (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) Calculate the following variances; Direct material usage Direct material price Direct labour efficiency Direct labour rate Variable overhead efficiency Variable overhead spending Fixed overhead volume Fixed overhead spending (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) What are ideal standards and what are currently attainable standards? Of these two standards, which is used by most organizations and why? (5 marks) Explain how variances are used to evaluate managers' performance. (4 marks)

Answer rating: 100% (QA)

a i Direct material usage variance Actual usage Standard usage x Standard price 3 500 000 40 000 x 7 View the full answer