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Besta Sdn Bhd (BSB), located at Shah Alam, Selangor, was incorporated on 1 November 2019. The company produces metal casting. BSB uses standard costing for

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Besta Sdn Bhd (BSB), located at Shah Alam, Selangor, was incorporated on 1 November 2019. The company produces metal casting. BSB uses standard costing for its cost management system. It allocates variable manufacturing overhead to its products on the basis of standard direct manufacturing labor-hours. The standard cost for direct material (steel) is RM9.00 per kilogram which 2 kilograms are needed per metal casting and variable manufacturing overhead with rate at RM2 per hour. As for direct labour, the standard price will be RM10 per hour and it needs 5 direct labour hours to produce one metal casting. The actual results from last month's production of 1,950 metal casting are as follows: 4,500 kilograms of direct material (steel) was purchased at RM9.60 per kilograms Actual kilograms of direct material (steel) used: 4,000. Actual direct labour hours worked was 11,000 hours at RM9.85 per hour. Actual variable overhead incurred was RM20,000. Required: (Show all calculations) (a) Calculate the direct material price and quantity variances. State whether the variances are favourable or unfavourable. (3 marks) Required: (Show all calculations) (a) Calculate the direct material price and quantity variances. State whether the variances are favourable or unfavourable. (3 marks) (b) Calculate the direct labour rate and efficiency variances. State whether the variances are favourable or unfavourable (3 marks) (c) Calculate the variable overhead rate and efficiency variance State whether the variances are favourable or unfavourable. (3 marks) (d) Based on answer in requirement (a), (b) and (c), state the possible causes of an unfavorable variance (if any) and give your recommendation on how BSB could improve these unfavourable variances (if any). (11 marks) Antal: 20 marks)

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