Zeta Ltd has the following details: Material purchased 24,000 kg = 1,05,600 Material consumed= 22,800 kg Actual wages paid for 5,940 hours = 29,700 Unit produced 2,160 units. Standard rates and prices are: Direct material rate is 4.00 per unit Direct labour rate is 4.00 per hour Standard input is 10 kg. for one unit Standard labour requirement is 2.5 hours per unit. Calculate all material variances.
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.
Zeta Ltd has the following details:
Material purchased 24,000 kg = 1,05,600
Material consumed= 22,800 kg
Actual wages paid for 5,940 hours = 29,700
Unit produced 2,160 units.
Standard rates and prices are:
Direct material rate is 4.00 per unit
Direct labour rate is 4.00 per hour
Standard input is 10 kg. for one unit
Standard labour requirement is 2.5 hours per unit.
Calculate all material variances.
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