Tutorials Question 1 21 Marks-18 Minutes Supp 2013 Nov Design Plastics CC produces and sells one product only, the standard cost for which is Direct material 11 litres @ N$2.00 per kilogram N$ 22.00 Direct labour 5 hours N56.00 per hour NS 30.00 Variable overheads 5 hours N$2.00 per hour NS 10.00 Fixed production overhead NS 20.00 Total standard production cost per unit NS 82.00 Standard gross profit NS 38.00 Standard selling price NS120.00 The variable overhead is incurred in direct proportion to the direct labour hours worked. The unit rate for fixed production overhead is based on an expected annual output of 24 000 units produced Page 52 of 71 at an even rate throughout the year. Assume that each calendar month is equal and that the budgeted sales volume for March 2013 was 2 000 units. The following were actual results recorded during March 2013 Number of units produced and sold 1 750 units Sales revenue NS218 750 Direct materials: 19 540 litres purchased and used NS41 034 Direct labour: 8 722 hours NS47971 Variable overhead NS26 166 Fixed production overhead NS37-410 NS152 581 Gross profit NS 66 169 REQUIRED MARKS 1.1. Calculate the material price variance 1.2. Calculate the material quantity variance 1.3 Calculate the direct labour rate variance 1.4 Calculate the direct labour efficiency variance 1.5. Calculate the variable manufacturing overhead spending variance. 1.6. Calculate the variable manufacturing overhead efficiency variance