Sipalo Ltd manufacturer product X using three differnt materials namely,M$1,$M$2,$and M$3.$The standard cost and revenue per unit are as follows:

Selling pricek$400,$

Direct material A $5$kg at k$25$ pre kg $=125$

Direct material B $3$kg at k$22$ per kg$=66$

Direct labour $3$hours at k$10$ per hour $=30$

Valuable overheads $3$ hours at k$7$ per hour$=21$

Standard contribution$=158$

The budgeted production and sales for the period in question were $10,000$ units.Thise mix of materials be veried and there the usage variance can subdivided into mix and yield variance.For the oeriod under review $,$the actual results were as follows:

production and sales $9000$ units

Sales revenue $4,455,000$

Direct material A $35000$kg $910,000$

Direct material B $50,000$ kg $1,050,000$

Direct labour $30,000$ hours $385,000$

Variable overheads $230,000$

The general market prices at the time of purchase for material A and material B were k$21$ per kg andk$19$ per kg respectively.

There was no opening or closing inventories during the period.

required

calculate the following:

Material M$1$ price

Material M$2$ price

Labour rate

Labour efficiency

Variable overheads expenditure

variable overheads efficiency

Sales price

Sales volume contribution

material mix

Material yield

Material M$1$ price p$[$aning

Materia M$2$ price planing

Explain why variances are analysed into planning and operational variance?

Answer rating: 100% (QA)

Answer Lets start by calculating the various variances and prices as required 1 Material M1 price Actual cost of Material M1 910000 Actual quantity of ... View the full answer