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Use the information provided below to calculate the following variance. state whether the variance is favourable or unfavourable. Labour efficiency variance Royal Ltd uses the
Use the information provided below to calculate the following variance. state whether the variance is favourable or unfavourable.
Labour efficiency variance
Royal Ltd uses the standard costing system. The standards and actual information for May 2022 for the only product that it manufactures are as follows:
standard:
direct materials | 4kg @ $7 per kg |
direct labour | 5 hours @ $ 60 per hour |
variable manufacturing overheads | R12 per labour hour |
normal production | 12 000 units per month |
Actual information for May 2022:
Direct materials used | 43 000kg @ $ 7.50 per kg |
Direct labour | 56 000 hours @ $58 per hour |
Variable manufacturing overheads | $649 600 |
Production | 11 000 units manufactured |
Direct materials used 43 000kg @ $ 7.50 per kg Direct labour 56 000 hours @ $58 per hour Variable manufacturing overheads $649 600 Production 11 000 units manufactured
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