Aspen Company produces a special product called Styfex. At the beginning of the year, the company has the following standard cost sheet: Direct materials (5 kilos @ $2.6 per kilo) $13.00 Direct labour (0.75 hour @ $18 per hour) 13.50 Fixed overhead (0.75 hour @ $4 per hour) 3.00 Variable overhead (0.75 hour @ $3 per hour) 2.25 Standard cost per unit $31.75 Aspen Company computes its overhead rates using budgeted volume, which is 54,000 units. The actual results for the year are as follows: Units produced: 53,000 Direct materials purchased: 274,000 kilograms at $2.50 per kilogram The direct material used: 270,300 kilograms Direct labour: 40,100 hours at $17.95 per hour Fixed overhead: $161,700 Variable overhead: $122,000 Required: Show ALL your workings. i. Calculate direct materials purchase price and quantity variances. ii. Calculate direct labour rate and efficiency variances. iii. Calculate variable overhead spending and efficiency variances.
Aspen Company produces a special product called Styfex. At the beginning of the year, the company
has the following
Direct materials (5 kilos @ $2.6 per kilo) $13.00
Direct labour (0.75 hour @ $18 per hour) 13.50
Fixed overhead (0.75 hour @ $4 per hour) 3.00
Variable overhead (0.75 hour @ $3 per hour) 2.25
Standard cost per unit $31.75
Aspen Company computes its overhead rates using budgeted volume, which is 54,000 units. The
actual results for the year are as follows:
Units produced: 53,000
Direct materials purchased: 274,000 kilograms at $2.50 per kilogram
The direct material used: 270,300 kilograms
Direct labour: 40,100 hours at $17.95 per hour
Fixed overhead: $161,700
Variable overhead: $122,000
Required:
Show ALL your workings.
i. Calculate direct materials purchase price and quantity variances.
ii. Calculate direct labour rate and efficiency variances.
iii. Calculate variable overhead spending and efficiency variances.
iv. Calculate fixed overhead budget and volume variances.
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