uestion

he budget for product A for a period is as follows:Production2,000 units

Sales2,000 units: $15 per unit

Direct material cost6,000 kilos of XYZ: $2 per kilo

Direct labour cost4,000 hours: $2 per hour

Actual results for the period were as follows:

Production2,500 units

Sales 2,250 units:$15 per unit

Direct material cost5,000 kilos purchased and consumed at a total cost of $12,000

Direct labour cost6,000 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