Required:

a.	Calculate materials price and efficiency variances and indicate whether these variances are favourable or unfavourable.
b	Discuss the possible causes of materials price and efficiency variances.
c.	Calculate labour rate and efficiency variances and indicate whether these variances are favourable or unfavourable.
d	Discuss the possible causes of labour rate and efficiency variances.
e.	Calculate variable overhead spending and efficiency variances and indicate whether these variances are favourable or unfavourable.
f.	The variable overhead efficiency variance has nothing to do with efficient use of variable overhead. Do you agree or disagree? Why?

Standard costing and Analysis Murdoch past exam question Q1 Ameco Manufacturing Company has developed the following standards for one of their products: STANDARD VARIABLE COST CARD ONE UNIT OF PRODUCT Direct materials: 20 square metres @ $10 per square metre Direct labour: 8 hours @ $12 per hour Variable overhead: 8 hours @ $6 per hour Total standard variable cost per unit $200.00 96.00 48.00 $344.00 The following activities occurred during the month of May: Materials purchased 150,000 square metres at $10.50 per square metre Materials used 96,000 square metres Units produced 5,000 units Direct labour 41,000 hours at $13.10 per hour Actual variable overhead $238,000