Question
Question 4 (30 marks): TAGO Ltd. produces and sells one product, TAD, the standard cost for one unit being as follows: Direct materials - 10
Question 4 (30 marks): TAGO Ltd. produces and sells one product, TAD, the standard cost for one unit being as follows:
Direct materials - 10 kilograms at 20/kg | 200 |
Direct wages - 5 hours at 6 per hour | 30 |
During October 2020 the actual results were as follows: | |
Production | 750 units |
Direct materials | 7,800 kg used, costing 159,900 |
Direct wages | 4,200 hours worked for 24,150 |
Required: Calculate the following variances for the month of October 2020, identify possible causes for the adverse/unfavorable variance(s) calculated and recommend corrective actions for improvement:
1.Direct wage rate variance; and 2. Direct labour efficiency variance.
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