Kaffee Ltd has the following standard cost. Notes Standard Sales revenue 16 Direct material 5 per kg
Question:
Kaffee Ltd has the following standard cost.
Notes | Standard | |
Sales revenue | £16 | |
Direct material | £5 per kg | £5 |
Direct labour | £4 per hour | £8 |
Budgeted fixed costs were £3,000 and sales in units 4,000 units
2,200 units were sold and the actual results for these sales were:
Notes | Actual | |
Total Sales revenue | £57,200 | |
Direct materials | 4,400kg | £13,200 |
Direct labour | 2,200 hours | £17,600 |
Actual fixed costs were £7,000.
3a) Calculate the materials and labour sub-variances using the above information. Then explain each variance. | 14 marks |
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3b) State whether the following statements are true or false. If FALSE explain why. | 13 marks |
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3d) To what degree do you consider variance analysis to be a useful business tool. | 5 marks |
(type your answer here) |
Cost Management Measuring, Monitoring and Motivating Performance
ISBN: 978-1119185697
3rd Canadian edition
Authors: Leslie G. Eldenburg, Susan K. Wolcott, Liang-Hsuan Chen, Gail Cook