Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Enzer Ltd budgeted to manufacture and sell drums of a purifying agent during October 2021. The standard cost per drum manufactured is as follows: Direct

image text in transcribed
Enzer Ltd budgeted to manufacture and sell drums of a purifying agent during October 2021. The standard cost per drum manufactured is as follows: Direct material: Enger 8 litres@R2 per litre R16.00 Direct labour 1hour @R5 per hour R5.00 Variable overheads 1 hour @ R2.50 per hour R2.50 Fixed overheads 1 hour @ R3.50 per hour R3.50 Total R27.00 During October 2021, 80 000 drums of purifying agent were manufactured and sold. Actual costs incurred during this period were as follows: Enger: 700 000 litres were purchased and used at a cost of R1 330 000. Direct labour: 82 000 direct labour hours worked at a total cost of R414 100. Manufacturing overheads: R575 200 (R362 000 of this amount was fixed). Required: Calculate the following variances: i. Direct material price and quantity variances. (2) Direct labour rate and efficiency variances. (2) ili. Variable rate and efficiency variances, (1) Note: Use labels to clearly indicate whether your answer is favourable (F) or unfavourable (U). Round off cost per unit to 2 decimal places and total costs to the nearest R1. All unfavourable variances must be preceded by a minus sign. Failure to adhere to these instructions will result in you forfeiting the mark for that

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

Core Concepts Of Accounting Information Systems

Authors: Nancy A. Bagranoff, Mark G. Simkin, Carolyn Strand Norman

11th Edition

9780470507025, 0470507020

More Books

Students also viewed these Accounting questions

Question

What are the requirements for effective learning at work?

Answered: 1 week ago