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QUESTION [25] Manac Ltd manufactures clothing and uses a standard costing system. The following is the standard variable cost for one of their products: Material @ R8.00 per kg Labour @ 1.5 hrs Variable overheads -varying with hours worked: 1.5 hrs @ R6.00 per hour -varying with production Budgeted sales - 11700 units Actual results are as follows: Materials purchased 32 000 kg R262 400 Labour (Rate per hour R16.00) R304 000 R 20.00 22.50 9.00 7.00 Variable overheads -varying with hours worked varying with production Sales Additional information: The budgeted selling price is R50.00 per unit. 1. 12 000 units were manufactured and sold. R108 300 R 78 000 R624 000 2. There were no completed units, work in progress or material on hand at the beginning or end of the period. 1. Material price variance Required: (5) Calculate and state whether the following variances are favourable unfavourable: 1. Material quantity variance 2. Labour rate variance (5) (5) 3. Labour efficiency variance (5) (5) 4. Selling price variance

QUESTION [25] Manac Ltd manufactures clothing and uses a standard costing system. The following is the standard variable cost for one of their products: Material @ R8.00 per kg Labour @ 1.5 hrs Variable overheads -varying with hours worked: 1.5 hrs @ R6.00 per hour -varying with production Budgeted sales - 11700 units Actual results are as follows: Materials purchased 32 000 kg R262 400 Labour (Rate per hour R16.00) R304 000 R 20.00 22.50 9.00 7.00 Variable overheads -varying with hours worked varying with production Sales Additional information: The budgeted selling price is R50.00 per unit. 1. 12 000 units were manufactured and sold. R108 300 R 78 000 R624 000 2. There were no completed units, work in progress or material on hand at the beginning or end of the period. 1. Material price variance Required: (5) Calculate and state whether the following variances are favourable unfavourable: 1. Material quantity variance 2. Labour rate variance (5) (5) 3. Labour efficiency variance (5) (5) 4. Selling price variance

FINANCIAL ACCOUNTING
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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QUESTION [25] Manac Ltd manufactures clothing and uses a standard costing system. The following is the standard variable cost for one of their products: Material @ R8.00 per kg Labour @ 1.5 hrs Variable overheads -varying with hours worked: 1.5 hrs @ R6.00 per hour -varying with production Budgeted sales - 11700 units Actual results are as follows: Materials purchased 32 000 kg R262 400 Labour (Rate per hour R16.00) R304 000 R 20.00 22.50 9.00 7.00 Variable overheads -varying with hours worked varying with production Sales Additional information: The budgeted selling price is R50.00 per unit. 1. 12 000 units were manufactured and sold. R108 300 R 78 000 R624 000 2. There were no completed units, work in progress or material on hand at the beginning or end of the period. 1. Material price variance Required: (5) Calculate and state whether the following variances are favourable unfavourable: 1. Material quantity variance 2. Labour rate variance (5) (5) 3. Labour efficiency variance (5) (5) 4. Selling price variance
Transcribed Image Text:QUESTION [25] Manac Ltd manufactures clothing and uses a standard costing system. The following is the standard variable cost for one of their products: Material @ R8.00 per kg Labour @ 1.5 hrs Variable overheads -varying with hours worked: 1.5 hrs @ R6.00 per hour -varying with production Budgeted sales - 11700 units Actual results are as follows: Materials purchased 32 000 kg R262 400 Labour (Rate per hour R16.00) R304 000 R 20.00 22.50 9.00 7.00 Variable overheads -varying with hours worked varying with production Sales Additional information: The budgeted selling price is R50.00 per unit. 1. 12 000 units were manufactured and sold. R108 300 R 78 000 R624 000 2. There were no completed units, work in progress or material on hand at the beginning or end of the period. 1. Material price variance Required: (5) Calculate and state whether the following variances are favourable unfavourable: 1. Material quantity variance 2. Labour rate variance (5) (5) 3. Labour efficiency variance (5) (5) 4. Selling price variance
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