Question 1 Marks 20

A company produces and sells one product only, the Thing, the standard cost for one unit being as follows:

Direct material - 05 litres at $6per litre Direct wages- 5 hours at $6 per hour Fixed production overhead

Total standard cost

Production Material Direct wages

Fixed production overhead $47,000

Required:

$

The fixed overhead included in the standard cost is

30 based on an expected monthly output of 900 units. 30 Fixed production overhead is absorbed of the basis 50 of direct labor hours.

During April the actual results were as follows:

1) Calculate price and usage variances for material.

2) Calculate labor rate and efficiency variances.

Question 1 Marks 20 A company produces and sells one product only, the Thing, the standard cost for one unit being as follows: $ The fixed overhead included in the standard cost is Direct material - 05 litres at Soper litre 30 based on an expected monthly output of 900 units. Direct wages- 5 hours at $6 per hour 30 Fixed production overhead is absorbed of the basis Fixed production overhead 50 of direct labor hours. Total standard cost 110 During April the actual results were as follows: Production 800 units Material 4,300 liters used, costing $23,650 Direct wages 4,200 hours worked for $24,150 Fixed production overhead $47,000 Required: 1) Calculate price and usage variances for material. 2) Calculate labor rate and efficiency variances