AS N er vi goodt i gang uses standard costs in its operating accounts. In production department
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Question:
AS "Nå er vi goodt i gang" uses standard costs in its operating accounts. In production department 1 (T1) all direct materials are added at the beginning of the manufacturing process. Direct salary and indirect manufacturing costs accrue evenly throughout the entire manufacturing process in T1.
The following standard calculation is available:
Direct materials | |
Number of kilos | 6.0 kg |
Price per kilo | kr 20.00 |
Direct salary | |
Number of hours | 1 hour |
Salary per hour | kr 120 |
Indirect manufacturing costs | 120 kr per hour |
Standard fare T1 | Kr 380 |
The following activity was registered in the month of December:
Incoming balance goods in work | 300 pieces |
These were | 80% fully manufactured |
Finished production in the period | 2 500 pieces |
Closing Balance goods in work | 600 pieces |
Disse var | 40% fully manufactured |
The following cost information was recorded for T1 in the month of December:
Direct salary | kr 367 354 |
Direct labor hours | 2 587 hours |
Material consumption in kg | 16 020 kg |
Material cost | kr 312 390 |
QUESTION : Calculate the material variance, the price variance and the quantity variance. Discuss what the reasons for the individual deviations may be.
Standard material cost | |
Actual material cost | |
Total deviation |
Related Book For
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
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