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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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