Question 3 (6 marks)

Mendel Allison Company adopted a standard cost system several years ago. The standard costs for the prime costs of its single product follow:

Material: 10 kilograms @ R4.50 per kilogram R45.00

Labour: 6 hours @ R8.50 per hour R51.00

The following operating data were taken from the records for November:

1.Units completed: 5.800 units

2. Budgeted output: 6,000 units

3. Materials purchased 60,000 kilograms

4. Total actual labour costs R306,600

5. Actual hours of labour: 36,500 hours

6. Material usage variance: R2.250 U

7. Total material variance R450 U

Compute the following:

A. Labour rate variance

B. Labour efficiency variance

C. Actual kilograms of material used in the production process

D. Actual cost paid per kilogram of material