Use the information provided below to calculate the following variances for May 2021. Each answer must indicate whether the variance is favourable or unfavourable. 2.2 2.2.1 Material quantity variance 2.2.2 Labour efficiency variance 2.2.3 Total labour variance (without using the labour rate or efficiency variances) INFORMATION The expected production and standard costs for each unit of Product A manufactured by Luton Manufacturers are as follows: Expected production 30 000 units Direct material 15 kg at R8.60 per kg Direct labour 3 hours at R8 per hour Actual figures of Luton Manufacturers for Product A for May 2021 are as follows: Production 27 500 units Direct material used 432 000kg at R8.40 per kg Direct labour incurred 80 000 hours at R8.40 per hour
Use the information provided below to calculate the following variances for May 2021. Each answer must indicate whether the variance is favourable or unfavourable. 2.2 2.2.1 Material quantity variance 2.2.2 Labour efficiency variance 2.2.3 Total labour variance (without using the labour rate or efficiency variances) INFORMATION The expected production and standard costs for each unit of Product A manufactured by Luton Manufacturers are as follows: Expected production 30 000 units Direct material 15 kg at R8.60 per kg Direct labour 3 hours at R8 per hour Actual figures of Luton Manufacturers for Product A for May 2021 are as follows: Production 27 500 units Direct material used 432 000kg at R8.40 per kg Direct labour incurred 80 000 hours at R8.40 per hour
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please answer 2.2.1 2.2.2 and 2.2.3
Transcribed Image Text:2.2
Use the information provided below to calculate the following variances for May 2021. Each answer
must indicate whether the variance is favourable or unfavourable.
Material quantity variance
2.2.1
2.2.2
Labour efficiency variance
2.2.3
Total labour variance (without using the labour rate or efficiency variances)
INFORMATION
The expected production and standard costs for each unit of Product A manufactured by Luton
Manufacturers are as follows:
Expected production
30 000 units
Direct material
15 kg at R8.60 per kg
Direct labour
3 hours at R8 per hour
Actual figures of Luton Manufacturers for Product A for May 2021 are as follows:
Production
27 500 units
Direct material used
432 000kg at R8.40 per kg
Direct labour incurred
80 000 hours at R8.40 per hour
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