Question
The budget for production of Beetroot Juices for a period is as follows: Production 2,000 units Sales 2,000 units: $15 per unit Direct material cost
The budget for production of Beetroot Juices for a period is as follows: Production 2,000 units Sales 2,000 units: $15 per unit Direct material cost 6,000 kilos of XYZ: $2 per kilo Direct labour cost 4,000 hours: $2 per hour Actual results for the period were as follows: Production 2,500 units Sales 2,250 units: $15 per unit Direct material cost 5,000 kilos purchased and consumed at a total cost of $12,000
Direct labour cost 6,000 hours at a total cost of $9,000 There were no opening stocks. It is company policy to value stocks at standard cost. Required: A. Calculate the following variances: i.Material Cost Variance ii. Material Price Variance iii. Material Usage Variance iv. Labour Efficiency Variance v. Labour Rate Variance vi. Labour Cost Variance
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