Question

In: Accounting

Williams Ltd. manufactures and sells soaps. production. Thecompany operates a standard costing system. The standard...

Williams Ltd. manufactures and sells soaps. production. The company operates a standard costing system. The standard cost card for the product is as follows:

Direct material 1kg @ $8.00 per kg. $ 8.00

Direct labour 3hrs @ $4.50 per hr. $13.50

variable overhead 3hrs @ $0.50 per hr. $ 1.50

Fixed overhead 3hrs @ $7.40 per hr. $22.20

Budgeted output for the month of October 2019 was 6,500 units.

Actual results for October were as follows.

Production: 7 100 units

Materials consumed in production 7 500 kg @ $58 500

Labour hours 19 100 @ $89 700

Variable overheads $9 800

Fixed overheads $146 900

Required:

A. Calculate the following variances:

(a). Material price

(b) Material usage

(c). Labour rate

(d) Labour efficiency

(e). Variable overhead expenditure

Expert Solution

A. Material Price Variance

* Actual Price = $58500/7500 = $7.8

B. Material Usage Variance

C. Labour Rate Variance

D. Labour Efficiency Variance

E. Variable overhead expenditure variance

ekkarill92 answered 2 years ago

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