Tightfit Jeans Ltd operates a standard costing system and the following

information applies to the Shrunktight line of jeans for the month of

November:

The planned production for November was $10,000$ pairs and overhead might

alternatively be calculated:

REQUIRED

$($a$)$ Calculate:

$($i$)$ the direct material price variance

$($ii$)$ the direct material usage variance

$($iii$)$ the direct labour rate variance

$($iv$)$ the direct labour efficiency variance

$($y$)$ the total variable overhead varaince

$(12$ marks$)$

$($b$)$ What is a fixed overhead volume variance and what value can its

calculation have for management?

$(3$ marks$)$

$($c$)$ What is the total variable overhead variance?

$(2$ marks$)$

$($d$)$ Give $3$ reasons why labour efficinecy variances arise.

$(3$ marks$)$

$($Total $20$ marks$)$

$($LCCI Series $4$: $1988)$