Question

Table Top produces ping pong tables and has determined the following direct cost categories and

budgeted amounts:

Direct Materials Direct Labour Direct Marketing

Standard Inputs for 1 output 1.00

0.30 0.50

Standard Cost per input $7.50

9.00 3.00

Category

   

Actual performance for the company is shown below:

Actual output: (in units) Direct Materials:

Materials costs
Input purchased and used Actual price per input

Direct Manufacturing Labour: Labour costs

Labour-hours of input

Actual price per hour Direct Marketing Labour:

Labour costs Labour-hours of input Actual price per hour

Required

4,000

$30,225 3,900 $7.75

$11,470 1,240 $9.25

$5,880 2,100 $2.80

1. What is the combined total of the flexible-budget variances?

2. What is the rate variance of the direct materials?

3. What is the rate variance of the direct manufacturing labour and the direct marketing labour,

   respectively?

4. What is the efficiency variance for direct materials?

5. What are the efficiency variances for direct manufacturing labour and direct marketing labour,

   respectively?

Answer 1

Flexible budget = 4,000 units * standard cost per unit