Page 251 - DMGT403_ACCOUNTING_FOR_MANAGERS

Accounting for Managers

Notes 6. A gang of workers normally consists of 30 men, 15 women and 10 boys. They are paid at
standard hourly rates as under:
Men 80

Women 60
Boys 40
In a normal working week of 40 hours, the gang is expected to produce 2,000 units of
output.

During the week ended 31st Dec. 2007, the gang consisted of 40 men 10 women and 5 boys.
The actual wages paid were @ 70, 65 and 30 respectively 4 hours were lost due to
abnormal idle time and 1,600 were produced.
Calculate (a) Labour cost variance, (b) Wage variance, (c) Labour efficiency variance,
(d) Gang composition variance, (e) Labour idle time variance.

7. Calculate various overhead variances.
Items Budget Actual
No. of working days 20 22
Man hours per day 8,000 8,400
Output per man hour in units 1 .9
Overhead cost 1,60,000 1,68,000

8. Maris Ltd. has furnished the following information for the month of July 2008.

Budget Actual
Output (Units) 30,000 32,500
Hours 30,000 33,000
Fixed overheads 45,000 50,000
Variable overheads 60,000 68,000
Working days 25 26

Calculate the variances:
(a) Total overhead variances
(b) Fixed overhead variances
(c) Variable overhead variances.

9. Vision Ltd. furnishes the following information relation to budgeted sales and actual
sales for June 2008.

Product Budgeted Actual
Qty Price ( ) Qty Price ( )
A 1200 15 880 18
B 800 20 880 20
C 2000 40 2640 38
Calculate sales variance.

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