Beauty Glow Company currently produces a beauty product Acne Serum. The company uses the standard costing...

 

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Beauty Glow Company currently produces a beauty product Acne Serum. The company uses the standard costing system, using the following standard costs: The budgeted output and sales of Acne Serum are 40,000 units. The selling price per unit is RM100. One unit of Acne Serum requires 1,250 gram of direct material at a price of RM1.60 per kilogram. it takes 0.3 hour of direct labour to produce one unit of Acne Serum. The standard labour rate is fixed at RM8.00 per hour. The company absorbs its overhead on direct labour hour basis. For the year 2020, the company expects that 12,000 labour hours would be required to produce 40,000 units of Acne Serum. Budgeted fixed overhead and variable overhead are RM360,000 and RM480,000 respectively. During the year 2020, the following data were recorded: 35,000 units of Acne Serum were produced and sold at RM120 per unit. About 43,000 kilograms of direct material have been bought at the price of RM1.55 per kilogram. Labours have worked for 11,200 hours at a cost of RM86,800. Variable overhead and fixed overhead incurred were RM507,500 and RM350,000 respectively. Required: Calculate the following variances for the production of Acne Serum: i. ii. iii. iv. Direct material price and usage variances Direct labour rate and efficiency variances Fixed overhead expenditure variance Variable overhead expenditure variance Sales price and volume variances V. B. Beauty Glow Company currently produces a beauty product Acne Serum. The company uses the standard costing system, using the following standard costs: The budgeted output and sales of Acne Serum are 40,000 units. The selling price per unit is RM100. One unit of Acne Serum requires 1,250 gram of direct material at a price of RM1.60 per kilogram. it takes 0.3 hour of direct labour to produce one unit of Acne Serum. The standard labour rate is fixed at RM8.00 per hour. The company absorbs its overhead on direct labour hour basis. For the year 2020, the company expects that 12,000 labour hours would be required to produce 40,000 units of Acne Serum. Budgeted fixed overhead and variable overhead are RM360,000 and RM480,000 respectively. During the year 2020, the following data were recorded: 35,000 units of Acne Serum were produced and sold at RM120 per unit. About 43,000 kilograms of direct material have been bought at the price of RM1.55 per kilogram. Labours have worked for 11,200 hours at a cost of RM86,800. Variable overhead and fixed overhead incurred were RM507,500 and RM350,000 respectively. Required: Calculate the following variances for the production of Acne Serum: i. ii. iii. iv. Direct material price and usage variances Direct labour rate and efficiency variances Fixed overhead expenditure variance Variable overhead expenditure variance Sales price and volume variances V. B.

Answer rating: 100% (QA)

1 Direct material price variance Standard price Actual priceActual Quantity 1615543000 2150 Favourable Standard price is 16 and actual price of rawmat... View the full answer