Amo-Kye Chemicals Ltd. has projected to produce and sell 500 kegs of its commercial cleaner at GHS792
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Question:
Amo-Kye Chemicals Ltd. has projected to produce and sell 500 kegs of its commercial cleaner at GHS792 per keg.
In November 2020, the company produced and sold 510 kegs of the cleaner as follows:
GHS
Sales 401,148
Materials consumed:
C 51,600kg 81,180
D 101,500kg 204,970
5,000 hours of Labour used 36,234
The following were the standard direct costs per keg of the cleaner:
Materials:
C 100kg @ GHS1.584
D 200kg @ GHS 1.980
10 hours of Labour @ GHS7.128
Required:
- Compute the
- price and usage variances for each material
- wages rate and efficiency variances
- sales price and volume variances. (8 marks)
- Comment briefly (Favourable or Adverse) upon the information revealed by each of the variances you have computed. (2 marks)
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