Manacc Ltd manufactures clothing and uses a standard costing system.

The following is the standard variable cost for one of their products:

R

Material @ R8,00 per kg 20.00

Labour @ 1.5 hrs 22.50

Variable overheads

- varying with hours worked: 1.5 hrs @ R6.00 per hour 9.00

- varying with production 7.00

Budgeted sales - 11 700 units

Actual results are as follows:

Materials purchased 32 000 kg R262 400

Labour (Rate per hour R16.00) R304 000

Variable overheads

- varying with hours worked R108 300

- varying with production R 78 000

Sales R624 000

Additional information:

The budgeted selling price is R50.00 per unit.

1. 12 000 units were manufactured and sold.

2. There were no completed units, work in progress or material on hand at the beginning or end of

the period.

Required:

Calculate and state whether the following variances are favourable / unfavourable:

1.1 Material price variance (5)

1.2 Material quantity variance (5)

1.3 Labour rate variance (5)

1.4 Labour efficiency variance (5)

1.5 Selling price variance (5)