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Makola Steel factory ( Pty ) Ltd manufactures special steel pipes used in mines and uses a standard costing system: Standard cost per steel pipe
Makola Steel factory Pty Ltd manufactures special steel pipes used in mines and uses
a standard costing system:
Standard cost per steel pipe R
Direct material kg times R per kg
Direct labour
hours times R
per hour
Variable production overheads varying with
hours worked
hours times R per
hour
Variable selling costs
Budgeted selling price per steel pipe unit
During March units steel pipes were manufactured and sold.
Actual results per steel pipe Total R
Cost of direct material kg times R per kg
Cost of direct labour
hours times R per
hour
Variable production
overheads
Variable selling costs
Sales revenue
REQUIRED Marks
For the month of March:
a Calculate the direct material purchase price variance.
b Calculate the direct material quantity variance.
c Calculate the direct labour rate variance.
d Calculate the direct labour efficiency variance.
e Calculate the variable production overhead rate variance.
f Calculate the variable production overhead efficiency variance.
g Calculate the selling price variance.
h Calculate the variable selling costs spending variance.
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