Calibrate Limited produces a certain specification of product using four ingredients in the following standard proportions:

Calculate the following variances for each of the four materials and in total:

(i) Material price (ii) Material mix (iii) Material yield (iv) Material usage

During April 2019 the company absorbed fixed production overheads to its products using an overhead absorption rate of 17.50 per direct labour hour. The following information was also available: Budgeted direct labour hours for the month were 3,600. Standard direct labour hours based on actual production were 4,200. Actual direct labour hours worked were 5,040. Actual fixed production overhead cost incurred was 69,000. Calculate the fixed production overhead expenditure, capacity and efficiency variances and interpret the meaning of each of the variances.

Material Percentage Standard cost per tonne P 70% 301 Q 5% 1,612 R 7.5% 3,180 S 17.5% 2,350 During April 2019 the production figures showed that the actual materials purchased and used was 104 tonnes, while the standard quantity allowed for the output achieved was 100 tonnes. The actual material usage and actual material costs were: Material P Q R Usage in tonnes 77 4.5 9.5 13 Total COST 23,023 7,560 30,875 29,887 S Note: There are no opening or closing stocks