Salmon Electronics Ltd set the following standard costs per unit for 1984:

Direct materials: Standard price per kilo £1.20 Standard usage per unit 5 kilos Direct labour: Standard wage rate per hour £3.50 Standard time per unit 1.5 hours Factory overheads for 1984 were expected to be £27,000. Machine capacity was 18,000 machine hours p.a. and the standard machine time was also 1.5 hours per unit.
T he actual results for 1984 were Direct materials used 62,500 kilos costing £73,000 Direct labour cost £65,872 for 17,900 hours worked Factory overheads amounted to £27,000 Maximum capacity was obtained from the machines. Actual output was 12,000 units.
Required:

(a) Calculate the standard cost of one unit and of 12,000 units.

(b) Calculate the actual cost of 12,000 units.

(c) Calculate the material and labour variances.

Transcribed Image Text:

Direct materials: Standard price per kilo Direct labour: Standard usage per unit Standard wage rate per hour Standard time per unit 1.20 5 kilos 3.50 1.5 hours