1. Discuss at least 4 different types of standards.
2. State possible reasons for labour or wage variance.
3. Mukama Ltd. produces and sells only one product to esteemed customers. Management of the same company approached you for assistance because it is not sure whether the company is efficient in managing its available resources. The following details have been provided to you.

The company set the following standards or plans:

Direct material - 40,000 units costing a total amount of UGX. 1,200,000

Direct wages 20,000 hours at UGX. 6 per hour

Fixed production overheads amount to UGX. 1,000,000

The above cost structure is based on the budgeted output of 2,000kg.

Fixed production overhead is absorbed on the basis of direct labour hours

During a given period of time, the actual results were as follows:

Actual output 1,600kg

Materials purchased and used 31,200 units all costing UGX. 873,600

Direct wages 16,800 hours worked for all costing UGX. 109,200

Actual fixed production overhead UGX. 980,000

Required:

1. Calculate material price and usage variances.
2. Calculate labour rate and efficiency variances.
3. Fixed overhead expenditure variance.