QUESTION 1 (30)

1.1 INFORMATION:

Britelite Manufacturers produces a product which has the following standard costs:

Material A: 3 kilograms at R20 per kilogram

Material B: 5 kilograms at R15 per kilogram

Direct labour: 8 hours at R10 per hour

Fixed overheads: R120 000

Budgeted production: 9 000 units

Actual results for February 2019 were as follows:

Material A: 32 500 kg at R22 per kilogram

Material B: 54 000 kg at R14 per kilogram

Direct labour: 88 000 hours at R12 per hour

Fixed overheads: R132 000

Production: 10 000 units

REQUIRED:

Calculate the following:

1.1.1 Material mix variance (6)

1.1.2 Material yield variance (6)

1.1.3 Fixed manufacturing overheads volume capacity variance (3)

1.1.4 Fixed manufacturing overheads volume efficiency variance (2)

1.2 REQUIRED:

Use the information provided below to calculate the following:

1.2.1 Idle time variance (3)

1.2.2 Labour mix variance (7)

1.2.3 Labour yield variance (3)

Indicate whether each variance is favourable or unfavourable.

INFORMATION:

Standard labour costs for Electro Manufacturers to manufacture 2 000 units:

400 hours at R70 per hour

200 hours at R35 per hour

Actual labour costs incurred to produce 1 900 units:

290 hours at R R65 per hour

170 hours at R32 per hour

Idle time represents 10% of the recorded labour hours