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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 11 700 units Actual results are as follows: Materials purchased 32 000 kg R262 400 Labour (Rate per hour R16.00) R304 000 Variable overheads -varying with hours worked -varying with production Sales R108 300 R 78 000 R624 000 R 20.00 22.50 9.00 7.00 Additional information: The budgeted selling price is R50.00 per unit. 1. 12 000 units were manufactured and sold. 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 4. Selling price variance 3. Labour efficiency variance (5) (5) (5) (5)

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 11 700 units Actual results are as follows: Materials purchased 32 000 kg R262 400 Labour (Rate per hour R16.00) R304 000 Variable overheads -varying with hours worked -varying with production Sales R108 300 R 78 000 R624 000 R 20.00 22.50 9.00 7.00 Additional information: The budgeted selling price is R50.00 per unit. 1. 12 000 units were manufactured and sold. 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 4. Selling price variance 3. Labour efficiency variance (5) (5) (5) (5)

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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General Accounting Question 25 marks

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 11 700 units Actual results are as follows: Materials purchased 32 000 kg R262 400 Labour (Rate per hour R16.00) R304 000 Variable overheads -varying with hours worked -varying with production Sales R108 300 R 78 000 R624 000 R 20.00 22.50 9.00 7.00 Additional information: The budgeted selling price is R50.00 per unit. 1. 12 000 units were manufactured and sold. 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 4. Selling price variance 3. Labour efficiency variance (5) (5) (5) (5)
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 11 700 units Actual results are as follows: Materials purchased 32 000 kg R262 400 Labour (Rate per hour R16.00) R304 000 Variable overheads -varying with hours worked -varying with production Sales R108 300 R 78 000 R624 000 R 20.00 22.50 9.00 7.00 Additional information: The budgeted selling price is R50.00 per unit. 1. 12 000 units were manufactured and sold. 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 4. Selling price variance 3. Labour efficiency variance (5) (5) (5) (5)
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