The standard cost card for a product shows, Material cost 2 kg @ GH¢2.50 each = GH¢5.00 per unit Labour 2 hours @ GH¢10 each = GH¢20 per unit The actual which has emerged from business operations are as follows. Production – 8,000 units, material consumed – 16,500 kg @ GH¢2.40 each = GH¢39,600, Wages paid 18,000 hours @ GH¢8 each = GH¢144, 000 Calculate; - a) Labour Cost Variance b) Labour Rate Variance c) Labour Efficiency Variance

The standard cost card for a product shows, Material cost 2 kg @ GH¢2.50 each = GH¢5.00 per unit Labour 2 hours @ GH¢10 each = GH¢20 per unit The actual which has emerged from business operations are as follows. Production – 8,000 units, material consumed – 16,500 kg @ GH¢2.40 each = GH¢39,600, Wages paid 18,000 hours @ GH¢8 each = GH¢144, 000 Calculate; - a) Labour Cost Variance b) Labour Rate Variance c) Labour Efficiency Variance

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

The standard cost card for a product shows,
Material cost 2 kg @ GH¢2.50 each = GH¢5.00
per
unit
Labour 2 hours @ GH¢10 each = GH¢20
per
unit
The actual which has emerged from business operations are as follows.
Production – 8,000 units, material consumed – 16,500 kg @ GH¢2.40 each =
GH¢39,600,
Wages paid 18,000 hours @ GH¢8 each = GH¢144, 000
Calculate;
a) Labour Cost Variance
b) Labour Rate Variance
c) Labour Efficiency Variance
d) Material Cost Variance
e) Material Price Variance
f) Material Quantity Variance

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