A company has budgeted to produce 2,750 articles in 22,000 hours with fixed overheads of sh 88,000 and variable overheads of sh 55,000. The company’s production during the period of the budget was 2,000 articles in 21,500 working hours with fixed overheads costing sh 90,000 and variable overheads sh 58,000.
Required: Calculate:
(i)Overhead variance
(ii)Fixed production overhead variance
(iii)Variable production overhead variance
(iv)Fixed production overhead volume variance
b) Discuss the elements of a manufacturing cost statement