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UniqMe Sdn. Bhd. produces exclusive cooking equipment and uses a standard cost system for control purposes. In year 2020, the company produced 8000 exclusive frying pans, called Magic. The standard costs associated with this product, along with the actual costs incurred last year, are given below: Standard cost Actual cost (RM) (RM) Direct materials: Standard: 0.5kg at RM37 per kg Actual: 0.6kg at RM32 per kg 18.50 19.20 Direct labour: Standard: 0.9 hours at RM7.50 per hour 6.75 Actual: 0.8 hours at RM8.00 per hour 6.40 Variable manufacturing overhead: Standard: 0.9 hours at RM2.50 per hour 2.25 Actual: 0.8 hours at RM2.75 per hour рer 2.20 Total cost per frying pan RM27.50 RM27.80

UniqMe Sdn. Bhd. produces exclusive cooking equipment and uses a standard cost system for control purposes. In year 2020, the company produced 8000 exclusive frying pans, called Magic. The standard costs associated with this product, along with the actual costs incurred last year, are given below: Standard cost Actual cost (RM) (RM) Direct materials: Standard: 0.5kg at RM37 per kg Actual: 0.6kg at RM32 per kg 18.50 19.20 Direct labour: Standard: 0.9 hours at RM7.50 per hour 6.75 Actual: 0.8 hours at RM8.00 per hour 6.40 Variable manufacturing overhead: Standard: 0.9 hours at RM2.50 per hour 2.25 Actual: 0.8 hours at RM2.75 per hour рer 2.20 Total cost per frying pan RM27.50 RM27.80

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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UniqMe Sdn. Bhd. produces exclusive cooking equipment and uses a standard cost system for control purposes. In year 2020, the company produced 8000 exclusive frying pans, called Magic. The standard costs associated with this product, along with the actual costs incurred last year, are given below: Standard cost Actual cost (RM) (RM) Direct materials: Standard: 0.5kg at RM37 per kg Actual: 0.6kg at RM32 per kg 18.50 19.20 Direct labour: Standard: 0.9 hours at RM7.50 per hour 6.75 Actual: 0.8 hours at RM8.00 per hour 6.40 Variable manufacturing overhead: Standard: 0.9 hours at RM2.50 per hour 2.25 Actual: 0.8 hours at RM2.75 per hour Total cost per frying pan 2.20 RM27.50 RM27.80 There was no inventory of materials on hand to start the year. During the year, 4,800 kg of materials were purchased and used in production. The company's President was happy when he saw the actual costs exceeded standard costs by only RM0.30 per unit. He stated, “I afraid that our unit cost might get out of hand when we gave out those raises last year in order to stimulate output. But it is obvious our costs are well under control." Required: a. Compute direct material price and quantity variances. b. Compute direct labour rate and efficiency variances. c. Compute the variable overhead rate and efficiency variances. d. Do you agree with the President's statement that "our costs are well under control? Explain.
Transcribed Image Text:UniqMe Sdn. Bhd. produces exclusive cooking equipment and uses a standard cost system for control purposes. In year 2020, the company produced 8000 exclusive frying pans, called Magic. The standard costs associated with this product, along with the actual costs incurred last year, are given below: Standard cost Actual cost (RM) (RM) Direct materials: Standard: 0.5kg at RM37 per kg Actual: 0.6kg at RM32 per kg 18.50 19.20 Direct labour: Standard: 0.9 hours at RM7.50 per hour 6.75 Actual: 0.8 hours at RM8.00 per hour 6.40 Variable manufacturing overhead: Standard: 0.9 hours at RM2.50 per hour 2.25 Actual: 0.8 hours at RM2.75 per hour Total cost per frying pan 2.20 RM27.50 RM27.80 There was no inventory of materials on hand to start the year. During the year, 4,800 kg of materials were purchased and used in production. The company's President was happy when he saw the actual costs exceeded standard costs by only RM0.30 per unit. He stated, “I afraid that our unit cost might get out of hand when we gave out those raises last year in order to stimulate output. But it is obvious our costs are well under control." Required: a. Compute direct material price and quantity variances. b. Compute direct labour rate and efficiency variances. c. Compute the variable overhead rate and efficiency variances. d. Do you agree with the President's statement that "our costs are well under control? Explain.
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