Question

In: Accounting

Sinary Maju Sdn. Bhd. is a manufacturing company that produces plastic ware product. This company operates...

Sinary Maju Sdn. Bhd. is a manufacturing company that produces plastic ware product. This company operates a variances accounting system. Each unit of the product has the following standard requirements:

Description	Quantity	Price per unit	RM
Direct material	20 kgs	RM2 per kg	40
Direct labour	10 hours	RM5 per hour	50
Variable overhead	10 hours	RM3 per hour	30

Annual budgeted fixed overhead are RM864,000. Budgeted production of plastic ware product is 1,800 units.

The following actual data was recorded at the end of the May 2020:

Unit produced	1,500 units
Material used	29,800 kgs at RM1.80
Direct labour	14,900 hours at RM5.50
Variable overhead	RM44,000
Fixed overhead	RM69,600

Manufacturing overhead is charge on the basis of direct labour hours.

Required:

Compute the following variances for May 2020 and indicate whether each is favourable (F) or unfavourable (UF):

(a) Direct material price.

(

(b) Direct material usage.

(c) Direct labour rate.

(d) Direct labour efficiency.

(e) Variable overhead expenditure.

(f) Variable overhead efficiency.

(g) Fixed overhead efficiency.

(h) Briefly explain TWO (2) possible causes of the direct labour rate variance that you have calculated above.

Expert Solution

ekkarill92 answered 1 year ago

A. Gita Rani Sdn Bhd (GR) is a plastic manufacturer, which operates from a large production...

A. Gita Rani Sdn Bhd (GR) is a plastic manufacturer, which operates from a large production facility, where it undertakes continuous production 24 hours a day, seven days a week. The company’s production facility includes two warehouses, where the company’s raw materials and finished goods are stored. GR’s year end is 31 December. GR is finalizing the arrangements for the year-end inventory count, which is to be undertaken on 31 December 2019. The finished plastic bottle are stored in the...

Famay Sdn Bhd (FSB) is a manufacturing company that produces high-technology electrical products. One of the...

Famay Sdn Bhd (FSB) is a manufacturing company that produces high-technology electrical products. One of the items used in the product is component M-2712. Each month, 10 units of M-2712 is required in production. Currently, component M-2712 is produces internally with the following costs incurred: Direct material RM500 Direct labor RM4,000 Manufacturing overhead 150% of direct labor Material handling 20% from direct material Additional information related to production of M-2712 are as below: i. Material handling is a separate charge...

IT Excel Sdn. Bhd., a manufacturing company that produces a computer component leases a building for RM250,000 per year for its manufacturing facilities.

IT Excel Sdn. Bhd., a manufacturing company that produces a computer component leases a building for RM250,000 per year for its manufacturing facilities. In addition, the machinery in this building is being paid for in installments of RM50,000 per year. Each unit of the product produced costs RM40 in labor and RM20 in materials. The variable costs are estimated at 60 percent of total revenue.(a) Determine the price per unit of the product(b) Calculate the quantity at which the manufacturer...

TG Sdn. Bhd. is an electrical manufacturing company located in Pagoh. It is a wellestablished company...

TG Sdn. Bhd. is an electrical manufacturing company located in Pagoh. It is a wellestablished company with a favorable reputation for the quality of their products. The company manages to increase its production to meet their customer’s demand. Among the company’s goals is to have a better management in controlling product costs. Presented below is the information for the year ended 31 December 2019: RM Sales 6,300,000 Sales Expenses 210,000 Administration Expenses 135,000 Income Tax Expenses 75,000 Direct Material Purchased...

Lasting Sdn Bhd owns several units of mobile crane, which ware hired to contractors. In March...

Lasting Sdn Bhd owns several units of mobile crane, which ware hired to contractors. In March 2018, one of the cranes was involved in an accident with a bus. The owner of the bus admitted negligence and paid the following sums to Lasting Sdn Bhd: RM 30,000 being the actual cost of repairs to the crane RM 20,000 for not being able to use the crane for two weeks while undergoing repair. Required: Explain whether each of the sums received...

. Tun Teja Sdn Bhd (TTSB) is an organization that offers a variety of plastic bottles...

. Tun Teja Sdn Bhd (TTSB) is an organization that offers a variety of plastic bottles for home use. TTSB has FOUR (4) departments comprising TWO (2) service departments and TWO (2) production departments. ONE (1) service department utilizes machine hours for cost allocation, while another service department allocates its cost using number of employees. Costs information for the current year are based on the following data: Moulding Assembly Maintenance Cafeteria Overhead cost RM33,250 RM42,750 RM52,000 RM90,000 Machine hours 7,500...

CVD Sdn Bhd (CVDSB) is a company located at Kedah. The company produces picture frames. Traditionally,...

CVD Sdn Bhd (CVDSB) is a company located at Kedah. The company produces picture frames. Traditionally, all frames are hand-made, which require one hour of direct labor to finish producing one frame. With the increasing demand on their products, the company plans to switch their manufacturing layout to the automated production facility by installing a new automated production machine which will save the direct labor hour used by 25% per frame. The company plans to install a new machine on...

C. Gugusan Bintang Sdn Bhd (GBSB) produces customized products and assigns manufacturing costs using normal costing...

C. Gugusan Bintang Sdn Bhd (GBSB) produces customized products and assigns manufacturing costs using normal costing system. From its inception, GBSB has been using plantwide overhead rate based on direct labour hours (DLH) to assign manufacturing overhead costs to customer orders. Recently, as the amount of its indirect costs getting larger, the accounting department of GBSB was considering two options – (1) to change the allocation base to machine hours; (2) to use departmental rate. If the latter is chosen,...

Eco State Sdn. Bhd. (ECOS) operates a chain of retail outlets. The Board of Directors decides...

Eco State Sdn. Bhd. (ECOS) operates a chain of retail outlets. The Board of Directors decides not to buy the public liability insurance to cover the cost of compensation claims made against ECOS for injury or damage to its customers. The board of directors chooses to self-insure against potentially insignificant losses. ECOS expects to pay RM500,000 a year in respect of minor accidents to its customers. ECOS files a suit against its business partner for breach of contract. The company’s...

Below is the information on the operation of Spice Sdn. Bhd. which manufactures a health product...

Below is the information on the operation of Spice Sdn. Bhd. which manufactures a health product under the brand name SS: Standard Cost Card RM Direct material 0.8kg at RM12 per kg 9.60 Direct labour 3 hours at RM6 per hour 18.00 Variable overhead 4 hours at RM2.90 per hour 11.60 39.20 For the month of July 2020, the company has estimated to manufacture and sell 4,875 units of SS at a standard...