Question 2

The budgeted and standard data for productivity include the following

Direct labour

Ten employees work for 45 hour a week. The standard rate of pay is ksh 4 per hour. Output per hour is 40 kg of the product.

Direct material

Material                     quantity kg                price per kg

X                                 60                                2.00

Y                                 40                                1.00

Z                                  100                              1.40

From this standard matrix 180 kg of product is expected

Actual data for first week in April were as follows

Hours worked                                                 45

Rate of pay                                          ksh 4 per hour

Overhead incurred                              ksh 5400

Output                                                 1980 kg

Production and consumption of materials were as follows:

Material                     Quantity (kg)

X                                 700

Y                                 440

Z                                  1120

 

Required

Calculate the following direct material variance for each material (10mks)

Total

Price

Usage

mix

Calculate the direct labor efficiency variance (10mks)

Answer rating: 100% (QA)

Part A i Direct material total variance will ... View the full answer