(a) The following details have been extracted from the standard cost card of Product X which is manufactured by the XYZ chemical company using an absorption costing system: (i) Direct materials (2kg at £4.20) Direct labour (1 hour) Variable overhead (1 hour) Fixed overhead (1 hour) The fixed overhead charged to each unit of the product is based on a monthly production of 2,000 units. (ii) During October 20X3, the actual production amounted to 2,150 units an costs incurred were as follows: (iii) Direct materials (4,330 kg) Direct labour (2,200 hours) Variable overhead (2,200 hours) Fixed overhead (2,200 hours) £ 8.40 7.60 3.90 5.10 25.00 What was the material price variance? £ 18,100 14,980 8,160 9,950 What was the material usage variance? What was the direct labour rate variance?
(a) The following details have been extracted from the standard cost card of Product X which is manufactured by the XYZ chemical company using an absorption costing system: (i) Direct materials (2kg at £4.20) Direct labour (1 hour) Variable overhead (1 hour) Fixed overhead (1 hour) The fixed overhead charged to each unit of the product is based on a monthly production of 2,000 units. (ii) During October 20X3, the actual production amounted to 2,150 units an costs incurred were as follows: (iii) Direct materials (4,330 kg) Direct labour (2,200 hours) Variable overhead (2,200 hours) Fixed overhead (2,200 hours) £ 8.40 7.60 3.90 5.10 25.00 What was the material price variance? £ 18,100 14,980 8,160 9,950 What was the material usage variance? What was the direct labour rate variance?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![(a)
(b)
The following details have been extracted from the standard cost card of
Product X which is manufactured by the XYZ chemical company using an
absorption costing system:
Direct materials (2kg at £4.20)
Direct labour (1 hour)
Variable overhead (1 hour)
Fixed overhead (1 hour)
(i)
The fixed overhead charged to each unit of the product is based on a
monthly production of 2,000 units.
(ii)
During October 20X3, the actual production amounted to 2,150 units and
costs incurred were as follows:
Direct materials (4,330 kg)
Direct labour (2,200 hours)
£
8.40
7.60
3.90
5.10
Variable overhead (2,200
hours)
Fixed overhead (2,200 hours)
25.00
What was the material price variance?
£
18,100
14,980
8,160
9,950
What was the material usage variance?
What was the direct labour rate variance?
What was the direct labour efficiency variance?
(iii)
(iv)
(v) What was the variable overhead rate variance?
Explain the possible causes for the Material variances.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc96a9395-8e35-4a64-84ed-e6063210e4df%2F66c727d0-a28a-4efe-ba7f-29cb95fb7c04%2Frn8hv7k_processed.png&w=3840&q=75)
Transcribed Image Text:(a)
(b)
The following details have been extracted from the standard cost card of
Product X which is manufactured by the XYZ chemical company using an
absorption costing system:
Direct materials (2kg at £4.20)
Direct labour (1 hour)
Variable overhead (1 hour)
Fixed overhead (1 hour)
(i)
The fixed overhead charged to each unit of the product is based on a
monthly production of 2,000 units.
(ii)
During October 20X3, the actual production amounted to 2,150 units and
costs incurred were as follows:
Direct materials (4,330 kg)
Direct labour (2,200 hours)
£
8.40
7.60
3.90
5.10
Variable overhead (2,200
hours)
Fixed overhead (2,200 hours)
25.00
What was the material price variance?
£
18,100
14,980
8,160
9,950
What was the material usage variance?
What was the direct labour rate variance?
What was the direct labour efficiency variance?
(iii)
(iv)
(v) What was the variable overhead rate variance?
Explain the possible causes for the Material variances.
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