QUESTION 5 (B)

Footsteps company that manufactures shoes for children using a standard cost system. The standard production cost for a pair of shoes is as follows:

Cost	RM
Direct material (2 meters @ RM4.50)	9.00
Direct labor (0.5 hours @ RM16.00)	8.00
Overhead Standard	20.00
Total standard unit cost	37.00

The total variable overhead for a flexible budget is RM11 per unit and the total fixed overhead is RM180000 per year. Expected production is RM40000 units. In 2015, the company produced 42,000 units. The costs involved for production in 2015 are as follows:

Cost	RM
Direct materian (86000 @RM4.40)	378400
Direct labour (20600 hours @16.10)	331600
actual overhead	416000
Total cost	1126000

REQUIRED

a) Calculate the following variance:

i. Direct material price variance

ii. Direct material quantity variance

iii. Direct labor ladar variance

iv. Direct labor efficiency variance