A company produces a product which has a standard variable production cost of £8 per unit made up as follows :

Fixed manufacturing costs are treated as period costs . The following information is available for the period just ended:

Required:

(a) Determine for the period just ended:
(i) the number of units produced.
(ii) the raw material usage variance.
(iii) the total actual direct labour cost. and (iv) the actual cost per kilo of raw material used.

(b) Outline the possible causes of the raw material variances.

Transcribed Image Text:

Direct materials Direct labour Variable overhead lunit 4.60 (2 kilos x 2.30/kilo) 2.10 (0.7 hours x 3.00/hour) 1.30