QUESTION FOUR $[20]$

A Ltd operates a system of standard costs. The following information is available:ActualsRMaterials consumed $(3600$ units at R$52,50$ per unit$)189000$ Direct wages$22100$ Variable expenses$62000$ Fixed expenses$188000$ Output during the period was $3500$ units of finished product.For the above period, the standard production capacity was $4800$ units.The break up of standard costs per unit were:RMaterials $($one unit at R$50$ per unit$)50$ Direct wages$6$ Variable expenses$20$ Fixed exenses$40116$ The standard wages per unit is based on $9600$ hours for the above at a rate of R$3$ per hour$\mathrm{.}6400$ hours were actually worked during the period under review and in addition, wagesfor $400$ hours was paid compensate for idle time due to a breakdown of a machine. Thisincreased the overall wage rate to R$3,25$ per hour.

Required:

Please calculate the following variances:

$4\mathrm{.}1$

Material price variance $(3)$

$4\mathrm{.}2$

Material usage variance $(3)$

$4\mathrm{.}3$

Labour rate variance $(3)$

$4\mathrm{.}4$

Labour efficiency variance $(3)$

$4\mathrm{.}5$

Variable expenses variance $(2)$

$4\mathrm{.}6$

Fixed overhead expenditure variance $(2)$

Denote a favourable variance with an $($F$)$ and un unfavourable variance with a $($U$).$

$4\mathrm{.}7$ What possible measures can A Ltd put in place to ensure that its overall wage rate is reduced to a minimum by machine breakdowns in future? $(4)$