Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Martin Company manufactures and sells a chemical compound for industrial use. The following information was available at the beginning of 2017: Standard selling price 1,170.00

Martin Company manufactures and sells a chemical compound for industrial use. The following information was available at the beginning of 2017:

Standard selling price 1,170.00

Estimated production & sales (units) 2,025

Estimated direct materials (27 Kilograms at 10.00 per Kg.) 270.00

Estimated direct labour (20 hours at 7.00 per hour) 140.00

Estimated variable manufacturing overhead (15 hours at 5.00 per hour) 75.00

At the end of 2017, Martin Company established the following actual figures:

Production & sales 1,725 units sold for 1,210.00 per unit

Direct materials 63,000 Kg. at 9.00 per Kg.

Direct wages 45,000 hours at a total cost of 432,000

Variable manufacturing overhead 31,050 hours at a total cost of 230,000

Required: (a) Calculate the following variances and indicate whether the variances are adverse or favourable: (i) Materials price (ii) Materials usage (iii) Labour rate (iv) Labour efficiency (v) Variable overhead rate (vi) Variable overhead efficiency (b) Discuss four possible causes for each of the following variances: (i) Materials usage (ii) Labour efficiency.

c)Explain how you would determine which variance to examine further in relation to a work performance

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

Comprehensive Assurance & Systems Tool An Integrated Practice Set

Authors: Laura R Ingraham, J Greg Jenkins

3rd Edition

0133251969, 9780133251968

More Books

Students also viewed these Accounting questions

Question

Go, do not wait until I come

Answered: 1 week ago

Question

Make eye contact when talking and listening

Answered: 1 week ago

Question

Do not go, wait until I come

Answered: 1 week ago