OR QUESTION 3 (32 marks) Kaffee Ltd has the following standard cost. Notes Standard Sales revenue E10 Direct materiale 5 Direct labour E4 per hour Budgeted fixed costs were 3,000 and sales in units 4,000 units 2.200 units were sold and the actual results for these sales were: Notes Actual Total Server ES7.200 Direct materials 44000 13,200 Direct labout 2.200 hours 17.500 14 Actual fixed costs were 7,000. Jay Calculate the materials and labour subvariances using the above information. Then explain each variance Variance frame Calculation Explanation Variance Calculation Explanation m Varance frame Calculation 1) Vane name Calculation Explanation 36 Stine whether the following statements are true or false. I FALSE When doing variance analysis it is only necessary to compared and actual budgets. Exploration 'Alavourable sale price variance can only becaused by the price unit being greater than the budgeted price per unit: Explanation A favourable material usage variance can only be caused by materials being of better quality than budgeted." Explanation: Only significant diverse variances should be investigate Answer Explanation a total materials or labour variance equalsero, It does not need to be Investigated as the budgeted figure is the same as the actuale Explanation wa 'An adverse fixed overhead variance can simply be explained spending too much on overheads, it does not need to be Investigated further Answer Explanation OR QUESTION 3 (32 marks) Kaffee Ltd has the following standard cost. Notes Standard Sales revenue E10 Direct materiale 5 Direct labour E4 per hour Budgeted fixed costs were 3,000 and sales in units 4,000 units 2.200 units were sold and the actual results for these sales were: Notes Actual Total Server ES7.200 Direct materials 44000 13,200 Direct labout 2.200 hours 17.500 14 Actual fixed costs were 7,000. Jay Calculate the materials and labour subvariances using the above information. Then explain each variance Variance frame Calculation Explanation Variance Calculation Explanation m Varance frame Calculation 1) Vane name Calculation Explanation 36 Stine whether the following statements are true or false. I FALSE When doing variance analysis it is only necessary to compared and actual budgets. Exploration 'Alavourable sale price variance can only becaused by the price unit being greater than the budgeted price per unit: Explanation A favourable material usage variance can only be caused by materials being of better quality than budgeted." Explanation: Only significant diverse variances should be investigate Answer Explanation a total materials or labour variance equalsero, It does not need to be Investigated as the budgeted figure is the same as the actuale Explanation wa 'An adverse fixed overhead variance can simply be explained spending too much on overheads, it does not need to be Investigated further Answer Explanation
