18.10 What is the direct labour efficiency variance for the month?

a) £2 332 (F)

b) £2 332 (A)

c) £2 226 (F)

d) £2 226 (A).

The following information is relevant for questions 18.11A to 18.16A Estella Starr Limited produces garden sheds that are sold direct to the public in kit form. March is one of the company's best months for sales, and in March 20X3 the directors have set some ambitious targets. These are summarised in the following budget for the month;

£

Sales: 900 unitsX £217.00 195300 Costs Direct materials: 900 x (16 metres x £4.00) (57 600)

Direct labour: 900 x (4 hours x £6.30) (22 680)

Production overhead (62 300)

52 720 Other overheads (10 600)

Net profit 42 120 Estella Starr Limited does not absorb production overheads using an overhead absorption rate. It may be assumed that all of its overheads are fixed in nature. The company's actual results for the month are as follows;
£
Sales: 830 X £214.00 177 620 Costs Direct materials: 830 x (15 metres x £4.10) (51 045)
Direct labour: 830 x (4.1 hours x £6.00) (20 418)
Production overhead (61 400)
44 757 Other overheads (8 950)
Net profit 35 807