Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A. Safiyyah Sdn Bhd (SSB) manufactures women maxi dress for Malaysian market. It is a single product. The standard costs of materials and labor for

A. Safiyyah Sdn Bhd (SSB) manufactures women maxi dress for Malaysian market. It is a single product. The standard costs of materials and labor for productions are as follows:

Items Costs

Cloth (4 meters per dress) RM4.50 per meter

Zip and button RM0.50 per set

Lace RM1.50 per dress

Production labor cost RM9.00 per dress

Standard variable overhead cost is RM4 per dress (based on direct labor hours). Fixed overhead is budgeted at RM16,000 per month. In May 2020, the following data pertain to operations are as follows:

Materials purchased: 8,000 units costing RM39,400

Materials used in production of 1,500 units of finished product: 6,200 units of materials

Direct labor used: 1,500 hours costing RM15,000

Variable overhead costs incurred: RM5,960

Fixed overhead costs incurred: RM17,500

REQUIRED: (a) Analyze the following variances (show all workings):

i. Materials usage variance (4 Marks)

ii. Labor rate variance (2 Marks)

iii. Variable overhead spending variance (2 Marks)

iv. Fixed overhead budget variance (2 Marks)

(b) Propose ONE (1) reason and ONE (1) possible solution for the unfavorable variances in part (a) i and iv above if you are the Production Manager for SSB. (4 Marks)

B. Excell Electronics Sdn Bhd (EESB) manufacture an electronic appliances. The estimated total production costs of the product is RM500,000 for production of 2000 units of its products. In 2019, the production report show that a total of RM580,000 was spent to produce 3000 of its products. As the production manager for EESB,

a) Discuss the situation faced by EESB from the variance analysis perspective. Justify your answers whether EESB is in trouble or not. (2 Marks)

(b) Suggest TWO (2) appropriate decision for EESB to proceed with their next year production. Explain each suggestions. (4 Marks

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Survey Of Accounting

Authors: Thomas Edmonds, Philip Olds, Frances McNair, Bor-Yi Tsay

1st Edition

0073526770, 9780073526775

More Books

Students also viewed these Accounting questions

Question

2. To store it and

Answered: 1 week ago