Question

Question 4 – Standard Costing The standard cost of making a single product is: 5kg @$2.75 per kg 13.75

0.4 hours @$6.40 per hour 2.56.

Factory overhead 0.4 hours @3.50 per hour 1.400

$17.71 The factory overhead rate is based on a budgeted production of 20,000 units for the year, and budgeted fixed factory overhead of $12,000 for the month. Actual transactions and results for the year were: Direct Materials purchased 200,000kgs @ 2.78 per kg Direct Materials used 101,800 kgs Direct labour incurred 8,300 hours @ 6.48 per hour Factory Overhead incurred $28,400 Number of units produced 20,000 Calculate: (i) two variances for Direct material (ii) two Variances for direct tabour (iii) two variances each for fixed and variable overheads Show all working out in determining the variances

Answer 1

PART (I)

  

  

PART (II)

  

  

Data given to compute Overhead variance is missing