The budgeted and actual results of the distillation department for the week ended 30 June 2012 are
Question:
The budgeted and actual results of the distillation department for the week ended 30 June 2012 are shown below.
Distillation department: operating results –week ended 39 June 2012
Production
Production | Budgeted | Budgeted 2,500 barrels | Actual | Actual 2,400 barrels |
Material | 12,500 litres | $106,250 | 11,520 litres | $99,072 |
Labour | 10,000 labour hours | $60,000 | 10,080 labour hours | $61,488 |
Fixed overheads | 20,000 machine hours | $200,000 | 18,960 machine hours | $185,808 |
Total cost | $366,250 | $346,368 |
Required:
a. Calculate the following:
i. Standard price of material per litre
ii. Actual price of material per litre
iii. Standard litres of material per barrel
iv. Standard labour per hour
v. Standard labour hours per barrel
vi. Standard machine hours per barrel
vii. Budgeted fixed overheads per budgeted machine hour
viii. Standard absorption cost per barrel
b. Using the data provided in the operating results and your answer to part (a) calculate the following variances:
i. Material price variance
ii. Material usage variance
iii. Labour rate variance
iv. Labour efficiency variance
v. Fixed overhead expenditure variance
vi. Fixed overhead volume variance
vii. Fixed overhead capacity variance
viii. Fixed overhead efficiency variance
Government and Not for Profit Accounting Concepts and Practices
ISBN: 978-1118155974
6th edition
Authors: Michael H. Granof, Saleha B. Khumawala