The standard composition of material that is used in the production of product ‘Flurry’ is as follows: Material. Cost per kg Total cost Material F R3/kg R12 Material L R2/kg R14 The actual results were as follows: Material issued to produce 100 units of product ‘Flurry’: Material F 450kg @ R3.20 Material L 650kg @ R2.80 Calculate the following material variances: Price variance Mix variance

The standard composition of material that is used in the production of product ‘Flurry’ is as follows: Material. Cost per kg Total cost Material F R3/kg R12 Material L R2/kg R14 The actual results were as follows: Material issued to produce 100 units of product ‘Flurry’: Material F 450kg @ R3.20 Material L 650kg @ R2.80 Calculate the following material variances: Price variance Mix variance

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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Variance Analysis for Decision Making Bronfenbrenner Co. uses a standard cost system for its single product in which variable overhead is applied on the basis of direct labor hours. The following information is given: Standard costs per unit: Raw materials (1.5 grams at $16 per gram) ............................ $24.00 Direct labor (0.75 hours at $8 per hour).................................. $6.00 Variable overhead (0.75 hours at $3 per hour)........................ $2.25 Actual experience for current year: Units produced ........................................................................ 22,400 units Purchases of raw materials (21,000 grams at $17 per gram) .. $357,000 Raw materials used.................................................................. 33,400 grams Direct labor (16,750 hours at $8 per hour).............................. $134,000 Variable overhead cost incurred.............................................. $48,575 Required: Compute the following variances for raw…
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