Question

Direct Materials 5 kg at a cost of R10 per kg Direct labour 3 hours at a cost of R10 per hour Variable overheads 3 hours at a cost of R3 per direct labour hour Fixed production overheads R 320 000 Standard selling price R 125 Production and sales 12 000 units Actual Data Direct Materials 62 000 kg at a cost of R10.50 per kg Direct labour 38 000 hours at a cost of R9 per hour Variable overheads R 115 000 Fixed production overheads R 325 000 Selling price R 127 Production and sales 13 000 units REQUIRED: Use the information provided above to calculate the following: 4.1 Materials price variance (2) 4.2 Materials quantity variance (2) 4.3 Labour rate variance (3) 4.4 Labour efficiency variance ( 3 ) 4.5 Variable overheads expenditure variance (3 ) 4.6 Variable overheads efficiency variance (3) 4.7 Fixed overheads expenditure variance ( 3 ) 4.8 Fixed overheads volume variance (4) 4.9 Sales price variance

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
Material Variance				Labor Variance				Overhead Variance
Standard Material Price		$       10.00		Standard Hour Rate		$       10.00		Standard Hour Rate		$         3.00
Standard Quantity	13000*5	65000		Standard Hour	13000*3	39000		Standard Hour	13000*3	39000
Actual Quantity		62000		Actual Hours		38000		Actual Hours		38000
Actual Quantity used		62000
Actual Matrial Price	259325/11500	$       10.50		Actual Hour Rate		$         9.00		Actual Hour Rate	115000/38000	$         3.02
Material Price Variance	AQ(AP-SP)			Labor Rate Variance	AH(AR-SR)			Overhead Rate Variance	AH(AR-SR)
	65000*(10.5-10)				39000*(9-10)				39000*(3.02-3)
	32500	Unfavorable			-39000	Favorable			780	Unfavorable
Material Quantity Variance	SP(AQ-SQ)			Labor Efficiency Variance	SR(AH-SH)			Overhead Efficiency Variance	SR(AH-SH)
	10*(65000-60000)				10*(39000-36000)				3*(39000-36000)
	50000	Unfavorable			30000	Unfavorable			9000	Unfavorable
Actual Cost Incurred		325000	a
Static Budget		320000	b
Budgeted Input For Actual Output*Budgeted Rate	13000*3*(320000/36000)	346667	c
Fixed Overhead Expenditure Variance	a-b	5000	U
Fixed Overhead Volume Variance	b-c	-26667	F
Sale Price Variance:
(127-125)*13000	26000