Question
Beds Ltd produces standard type of a waterbed. The company has budgeted production of 1,750 waterbeds in the month of June 2021. The standard cost
Beds Ltd produces standard type of a waterbed. The company has budgeted production of 1,750 waterbeds in the month of June 2021. The standard cost per waterbed was as follows:
Standard cost card for the product | |
Direct materials (9.4m2 at 42 per square metre) | 394.80 |
Direct labour (1.2 hour at 16 per hour) | 19.20 |
Fixed overheads for the month | 29,750 |
In the month of June, the actual production was 1,682 units of waterbeds with the following costs:
Actual cost | |
Direct materials (15,979 m2 ) | 687,097 |
Direct labour (2,355 hours) | 35,325 |
Fixed overheads | 29,010 |
In the month of June, labour was idle for 19 hours due to equipment breakdown,
a) Calculate total material cost variance, material price variance and material usage variance.
b) Calculate total labour cost variance, labour rate variance, labour efficiency variance and labour idle time variance.
c) Calculate fixed overhead expenditure variance.
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