Kosasa Company produces and sells one product only, Sobolo, the standard cost for one unit being as follows. GHC Direct material A – 10 kilograms at Ghc 20 per kg 200 Direct material B – 5 litres at Ghc 6 per litre Direct wages – 5 hours at Ghc 6 per hour Fixed production overhead Total standard cost The fixed overhead included in the standard cost is based on an expected monthly output of 900 units. 30 30 50 310 Fixed production overhead is absorbed on the basis of direct labour hours. During March the actual results were as follows. Production Material A Material B 800 units 7,800 kg used, costing GHC159,900 4,300 litres used, costing GHC23,650 4,200 hours worked for GHC24,150 Direct wages Fixed production overhead GHC47,000 Required: I. a. Calculate price and usage variances for each material. b. Calculate labour rate and efficiency variances. c. Calculate fixed production overhead expenditure.

Kosasa Company produces and sells one product only, Sobolo, the standard cost for one unit being as follows. GHC Direct material A – 10 kilograms at Ghc 20 per kg 200 Direct material B – 5 litres at Ghc 6 per litre Direct wages – 5 hours at Ghc 6 per hour Fixed production overhead Total standard cost The fixed overhead included in the standard cost is based on an expected monthly output of 900 units. 30 30 50 310 Fixed production overhead is absorbed on the basis of direct labour hours. During March the actual results were as follows. Production Material A Material B 800 units 7,800 kg used, costing GHC159,900 4,300 litres used, costing GHC23,650 4,200 hours worked for GHC24,150 Direct wages Fixed production overhead GHC47,000 Required: I. a. Calculate price and usage variances for each material. b. Calculate labour rate and efficiency variances. c. Calculate fixed production overhead expenditure.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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