QUESTION [25] Manac Ltd manufactures clothing and uses a standard costing system. The following is the standard variable cost for one of their products: R Material @ R8.00 per kg 20.00 Labour @ 1.5 hrs 22.50 Variable overheads -varying with hours worked: 1.5 hrs @ R6.00 per hour 9.00 -varying with production 7.00 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 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 3. Labour efficiency variance 4. Selling price 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: R Material @ R8.00 per kg 20.00 Labour @ 1.5 hrs 22.50 Variable overheads -varying with hours worked: 1.5 hrs @ R6.00 per hour 9.00 -varying with production 7.00 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 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 3. Labour efficiency variance 4. Selling price variance (5) (5) (5) (5)

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 46E: Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is...

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