RU Limited operates a system of standard costing in respect of one its products which is manufactured within a single cost centre.

The standard price of material is N$20 per litre. The standard wage rate is N$ 12 per hour and 5 hours are allowed to produce on unit Fixed production overhead is absorbed at the rate of 100% of wages cost.

During the month of September 2020 the following took place:

N$

Actual price (paid for materials purchased) 19.50 per litre

Total direct wages cost 156 000

Fixed production overhead 158 000

Variances

		N$
Type	Favour (F)	Unfavourable (U)
Direct material price	80 000
Direct material usage		5 000
Direct labour rate		5 760
Direct labour efficiency	2 760
Fixed production overhead expenditure		8 000

REQUIRED		Marks
2.5	Actual hours worked	4
2.6	Actual Wage rate per hour	4