Question: QUESTION 2 Answer the questions from the information provided. Use the information provided below to calculate and comment on the following variances. Labour efficiency variance
QUESTION 2
Answer the questions from the information provided.
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- Use the information provided below to calculate and comment on the following variances.
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- Labour efficiency variance (3 marks)
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- Variable overheads expenditure variance (3 marks)
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- Variable overheads efficiency variance (3 marks)
INFORMATION
The standard costing system is in operation at Project Max. The standards and actual information for April 2021 for the only product that is manufactured are as follows:
| Standards | |
| Direct materials | 5 metres @ R10 per metre |
| Direct labour | 4 hours @ R60 per hour |
| Variable overheads | R15 per labour hour |
| Normal production | 10 000 units per month |
| Actual information for April 2021: | |
| Direct materials used | 44 000 metres @ R8.80 per metre |
| Direct labour | 37 000 hours @ R58 per hour |
| Variable overheads | R576 000 |
| Production | 9 000 units manufactured |
FORMAT:
2.1.4
| Direct labour efficiency variance
|
| =
|
| =
|
| =
|
| Comment:
|
|
|
(3 marks)
2.1.5
| Variable overheads expenditure variance
|
| =
|
| =
|
| =
|
| =
|
| Comment:
|
|
|
(3 marks)
2.1.6
| Variable overheads efficiency variance
|
| =
|
| =
|
| =
|
| Comment:
|
|
|
(3 marks)
PLEASE ANSWER IN FULL USING THE TABLES ABOVE.
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