Chemico Ltd manufactures and distributes an industrial cleaning compound known as Splodge. the standard direct costs per cylinder of whi ch are:

The budgeted monthly production/sales is 500 cylinders and the selling price is £100 per cylinder.
The following details relate to May 1975 when 510 cylinders of Splodge were produced and sold:

You are required to compute

(a) the price and usage variances for each material

(b) the wages rate and efficiency variances

(e) the sales price and volume variances. and to comment briefly upon the information revealed by each of the variances you have computed.

Transcribed Image Text:

Material Labour 100 kg of A at 20p per kg 200 kg of B at 25p per kg 10 hours at 90p per hour