SECTION A Actual data Answer ALL the questions in this section. Direct materials 65 000 kg @ R13 per kg Use the information provided below to calculate the following variances. In each case state whether the variance is favourable or unfavourable. Direct labour 29 000 hours @R11 per hour 1.1 Material quantity variance Variable overheads R130 500 1.2 Labour rate variance 1.3 Labour efficiency variance Fixed manufacturing overheads R188 500 1.4 Variable overheads efficiency variance Selling price R195 1.5 Variable overheads expenditure variance Production and sales 10 000 units 1.6 Fixed overheads volume variance 1.7 Sales price variance INFORMATION N Mica Manufacturers makes and sells a single product. The company operates a standard costing system. Details of the budgeted and actual data for 2022 are as follows: Budgeted data Standard production costs per unit Direct materials 6 kg at a cost of R12 per kg Direct labour 3 hours at R10 per hour Variable overheads 3 hours at R5 per direct labour hour Fixed manufacturing overheads R180 000 Standard selling price R200 per unit Production and sales 10 000 units Activate Windows
SECTION A Actual data Answer ALL the questions in this section. Direct materials 65 000 kg @ R13 per kg Use the information provided below to calculate the following variances. In each case state whether the variance is favourable or unfavourable. Direct labour 29 000 hours @R11 per hour 1.1 Material quantity variance Variable overheads R130 500 1.2 Labour rate variance 1.3 Labour efficiency variance Fixed manufacturing overheads R188 500 1.4 Variable overheads efficiency variance Selling price R195 1.5 Variable overheads expenditure variance Production and sales 10 000 units 1.6 Fixed overheads volume variance 1.7 Sales price variance INFORMATION N Mica Manufacturers makes and sells a single product. The company operates a standard costing system. Details of the budgeted and actual data for 2022 are as follows: Budgeted data Standard production costs per unit Direct materials 6 kg at a cost of R12 per kg Direct labour 3 hours at R10 per hour Variable overheads 3 hours at R5 per direct labour hour Fixed manufacturing overheads R180 000 Standard selling price R200 per unit Production and sales 10 000 units Activate Windows
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Concept explainers
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.
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Transcribed Image Text:SECTION A
Actual data
Answer ALL the questions in this section.
Direct materials
65 000 kg @ R13 per kg
Use the information provided below to calculate the following variances. In each case state whether
the variance is favourable or unfavourable.
Direct labour
29 000 hours @ R11 per hour
1.1 Material quantity variance
Variable overheads
R130 500
1.2
Labour rate variance
Labour efficiency variance
Fixed manufacturing overheads
R188 500
1.3
1.4
Variable overheads efficiency variance
Selling price
R195
1.5
Variable overheads expenditure variance
Production and sales
10 000 units
1.6
Fixed overheads volume variance
1.7
Sales price variance
INFORMATION
Mica Manufacturers makes and sells a single product. The company operates a standard costing system. Details of the
budgeted and actual data for 2022 are as follows:
Budgeted data
Standard production costs per unit
Direct materials
6 kg at a cost of R12 per kg
Direct labour
3 hours at R10 per hour
Variable overheads
3 hours at R5 per direct labour hour
Fixed manufacturing overheads
R180 000
Standard selling price
R200 per unit
Production and sales
10 000 units
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