The standard cost of making a single product is:

10kg @$2.00 per kg 20.00

5 hours @$5.00 per hour 25.00

5hours @3.00 per hour 15.00

$60.00

The factory overhead rate is based on a budgeted production of 10,000 units for the year, and

budgeted fixed factory overhead of $50,000.

Actual transactions and results for the year were:

Direct Materials purchased 95,000kgs @ 2.05 per kg

Direct Materials used 92,000 kgs

Direct labour incurred 46,000 hours @ 4.90 per hour

Factory Overhead incurred $140,000

Number of units produced 9,000

Calculate:

(i) two variances for Direct material (3 marks)

(ii) two Variances for direct tabour (2 marks)

(iii) two variances each for fixed and variable overheads (6 marks)

Show all working out in determining the variances