Question
On October 1, 2004 Danish Company started manufacturing a new product Q. the company has installed a standard cost system to account for manufacturing costs.
On October 1, 2004 Danish Company started manufacturing a new product Q. the company has installed a standard cost system to account for manufacturing costs. The standard cost for account of product Q is:
Particular | Rs. |
Material, 6 kgs@Rs.10 per kg | 60 |
Direct Labour, 1 hour@Rs.40 per hour | 40 |
Factory overhead, 75% of direct labour cost | 30 |
| 130 |
The following data was obtained from Danish's record for October, 2004:
Actual production | 4,000 units |
Unit sold | 2,500 units |
Sales (Rs.) | Rs.500,000 |
Purchase of Raw material (26,000 kg) | Rs.273,000 |
Material price variance | Rs.13,000 Unfavourable |
Material quantity variance | Rs.10,000 Unfavourable |
Direct Labour rate variance | Rs.7,600 Unfavourable |
Direct Labour efficiency | Rs.8,000 Favourable |
Total Factory overhead variance | Rs.5,000 Unfavourable |
Required:
(i) Standard quantity of material allowed (ii) Actual quantity of material used)
(iii) Standard hours allowed (iv) Actual hours worked
(v) Actual direct labour rate (vi) Actual total factory overhead
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