Calculate the material, labour, and variable overheads variances for April 2020.
Midrand Ltd manufactures a single product and makes use of a
The following actual figures relate to April 2020:
Purchases and issues of raw material:
Material A at R0.55 per kg 40 000 kg
Material B at R0.80 per kg 29 000 kg
Direct labour at R2.10 per hour R 28 770
Manufacturing
Variable R 7 832
fixed R 14 200
Standard prime cost per unit is:
Material A at R0.50 per kg R0,75
Material B at R0.90 per kg R0.90
Direct labour at R2.20 per hour R1.10
Standard prime cost of production R 2.75
• Raw material stock is valued at standard cost.
• Overheads are allocated to production on the basis of labour hours.
• The flexible budget indicates that total overheads would amount to R21 450 and R22 275 at capacity
levels of 11 000 and 12 500 hours respectively. Normal capacity is 12 500 labour hours.
• Number of units manufactured was 26 000.
• The calendar factor for the month was 103%.
Calculate the material, labour, and variable overheads variances for April 2020.
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