Direct Material: 3kg x $125 per kg

Direct labour: 0.25 hours x $135 per hr

Variable overhead 0.25 hours x $78 per hr

Fixed Overhead 0.25 hours x $190 per hr

The following information relates to the month of November:

Units produced and sold 5000

Materials purchased 19500kg ($2 496 000)

Beginning inventory of materials 0kg

Ending inventory of materials 5 100 kg

Direct labour 1300 hrs at $134 per hr

Variable overhead incurred $98750

Fixed overhead incurred 231250

Budgeted production for the period was 4500 units

Required:

Standard Material

Standard Labour

Actual Material

Actual Labour

1. calculate the following variances, stating whether they are favourable (F) or unfavorable (U):
2. The direct materials price variance
3. The direct materials usage variance
4. The direct materials cost variance
5. The direct labour rate variance
6. The direct labour efficiency variance
7. Labour cost variance

1. Using the direct materials variances calculated, outline the possible situations when a production manager may or may not be held responsible for a variance. Where you conclude that the production manager is not responsible, you should indicate the manager responsible for the variance and explain why.

1. Compute the fixed production overhead volume variance and explain your result.

Answer rating: 100% (QA)

1 Direct Materials Variances a Direct Materials Price Variance Calculate the difference between the actual cost per kilogram and the standard cost per ... View the full answer