At the end of June 2019, Ash Design has spent RM 320,000 on 80,000 meters of fabric in the  production of 20,000 dolls. The production manager is concerned that they are paying more than  the company's standard RM 2 per meter fabric and is fully aware of the standard requirement of 8  meters of fabric per doll. The company spent RM 450,000 for 90,000 direct labor hours in the production of 20,000 dolls.  The standard labor per doll is 4 hours at an hourly rate of RM 4. A review of Ash Design 6-months  the performance revealed that the company had produced 20,000 dolls and incurred RM 90,000 of  variable production overheads and worked 90,000 direct labor hours. The standard variable  production overhead rate is RM 0.75 per direct hour for each doll and requires 4 standards direct  labor hours. Ash Design budgeted and actual fixed overhead incurred for the last six months are RM 180,000  and RM 152,000 respectively. The annual budgeted production volume for Ash Design is 50,000  dolls. Based on the information given, a) CALCULATE the following: i. Direct material variance ii. Direct labor variance iii. Variable overhead variance iv. Fixed overhead variance

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Topic Video
Question

At the end of June 2019, Ash Design has spent RM 320,000 on 80,000 meters of fabric in the 
production of 20,000 dolls. The production manager is concerned that they are paying more than 
the company's standard RM 2 per meter fabric and is fully aware of the standard requirement of 8 
meters of fabric per doll.
The company spent RM 450,000 for 90,000 direct labor hours in the production of 20,000 dolls. 
The standard labor per doll is 4 hours at an hourly rate of RM 4. A review of Ash Design 6-months 
the performance revealed that the company had produced 20,000 dolls and incurred RM 90,000 of 
variable production overheads and worked 90,000 direct labor hours. The standard variable 
production overhead rate is RM 0.75 per direct hour for each doll and requires 4 standards direct 
labor hours.

Ash Design budgeted and actual fixed overhead incurred for the last six months are RM 180,000 
and RM 152,000 respectively. The annual budgeted production volume for Ash Design is 50,000 
dolls.

Based on the information given,
a) CALCULATE the following:
i. Direct material variance
ii. Direct labor variance
iii. Variable overhead variance
iv. Fixed overhead variance

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Performance measurements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education