IM17.5 Intermediate: Labour and overhead variances and ex post wage rate analysis. Data The Eastern Division of Countryside Communications plc assembles a single product, the Beta. The Eastern Division has a fixed price contract with the supplier of the materials used in the Beta. The contract also specifies that the materials should be free of any faults. Because of these clauses in the contract, the Eastern Division has no material variances when reporting any differences between standard and actual production. You have recently accepted the position of assistant management accountant in the Eastern Division. One of your tasks is to report variances in production costs on a four- weekly basis. Fixed overheads are absorbed on the basis of standard labour hours. A colleague provides you with the following data: Standard costs and budgeted production - four weeks ended 27 November Unit price Standard cost per Beta Quantity Material Labour Fixed overhead Standard cost per Beta 30 metres 10 hours 10 hours 12.00 12.00 15.25 360.00 120.00 157.50 637.50 Budgeted production 1200 Betas 637.50 765000 Actual production - four weeks ended 27 November Quantity Total cost 31 200 metres 11 440 hours Actual cost of material Actual cost of labour Actual fixed cost overheads Actual cost of actual production 374400 136 708 207 000 718 108 Actual production 1040 Betas Task 1 (a) Calculate the following variances: (i) the labour rate variance; (ii) the labour efficiency variance (sometimes called the utilization variance); (iii) the fixed overhead expenditure variance (sometimes known as the price variance); (iv) the fixed overhead volume variance; (v) the fixed overhead capacity variance; (vi) the fixed overhead efficiency variance (sometimes known as the usage variance). (b) Prepare a statement reconciling the standard cost of actual production with the actual cost of actual production. Data