The following standard costs were developed for one of the products of ELJAY Sdn Bhd (ESB): STANDARD COST PER UNIT Direct materials Direct labor RM 12.00 40.00 3 feet a RM4.00 per foot 5 hours @ RM8.00 per hour 5 hours @ RM4.00 per hour 5 hours @ RM6.00 per hour Variable overhead 20.00 30.00 102.00 Fixed overhead Total standard cost per unit The following information is available regarding the company's operations for the period: Units produced Materials purchased Materials used Direct labor 40,000 240,000 feet at RM4.40 per foot 150,000 feet 220,000 hours at RMS.30 per hour Overhead incurred: Variable Fixed RM770,000 RM900,000 Budgeted fixed overhead for the period is RM960,000, and the standard fixed overhead rate is based on the expected capacity of 160,000 direct labor hours. REQUIRED: (a) Compute the following variances. Indicate whether it is Favorable (F) or Unfavorable (UF) variance.

Q: Define cost behaviour.

A: High-Low Method: The high-low method is the method by which the variable component and the fixed…

Q: Q.How do managers plan for variable overhead costs?

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Q: what are the possible causes of favourable Wage rate variance

A: Labor or wage Rate variance: The labor rate variance measures the difference between the actual and…

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Q: What is the Contribution Margin?

A:

Q: how to calculate average labor time?

A: Lets understand the basics. Direct material and direct labor is required to produce goods or…

Q: what is period costs?

A:

Q: What is the correlation between fixed, variable, and semi-variable costs??

A: Introduction:- Fixed Costs – Costs are same irrespective of the number of output produced Variable…

Q: What is a relationship between fixed, variable and semi-variable cost?

A: Cost can be defined as the amount incurred upon the production of goods and services for the final…

Q: Why do cost systems differ in terms of their level of sophistication

A: A cost system is a systematic framework or approach used by organizations to track, assign, and…

Q: What the strategy of types of internal failuer cost?

A: Internal failure costs are those costs that are caused by products or services not conforming to…

Q: Which one of the following is the variance that deals with under or over achievement of budgeted…

A: Budgeted direct labor hours refer to the estimated or planned amount of time that is allocated for…

Q: How is contribution margin calculated?

A: Contribution margin means sales revenue over and above the variable costs of production and selling…

Q: What does the Unit contribution margin express?

A: Break Even Point:                 Break Even Point is defined as the level where there is no profit…

Q: The product cost  period cost  opertunity cost

A: Solution:- 1)Calculation of product cost as follows under:- Product cost means costs incurred to…

Q: How to calculate total prime cost

A: Meaning of Prime Cost: Prime costs are a firm's expenses directly related to the materials and labor…

Q: What connection exists between unit profit and labor costs?

A: A cost is the amount of money that was expended during the production or delivery of a good or…

Q: What is cost management?

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: cost benefit model

A: The benefit under the cost-benefit model is calculated by deducting the associated cost from the…

Q: What is the independent and dependent variable? Labor Cost or Material Cost

A: A variable cost is one that changes depending on the volume of output or the scope of the services…

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance. 

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.