Page 252 - DMGT403_ACCOUNTING_FOR_MANAGERS

Unit 11: Variance Analysis

10. Standard Cost for Product RBT Notes

Materials (10kg × 8 per kg) 80
Labour (5hrs × 6 per hr) 30
Variable O/Hds (5hrs × 8 per hr) 40
Fixed O/Hds (5hrs × 9 per hr) 45
195
Budgeted Results
Production 10000 units
Sales 7500 units
Selling Price 300 per unit
Actual Results
Production 8000 units
Sales 6000 units
Materials 85000 kg Cost 700000
Labour 36000 hrs Cost 330900
Variable O/Hds 400000
Fixed O/Hds 500000
Selling Price 260 per unit
Calculate
(a) Material total variance
(b) Material price variance
(c) Material usage variance

(d) Labour total variance
(e) Labour rate variance
(f) Labour efficiency variance
(g) Variable overhead total variance and all sub-variances
(h) Fixed Production overhead total Variance and all sub-variances

(i) Selling price variance
(j) Sales volume variance

Answers: Self Assessment

1. (b) 2. (d)
3. (d) 4. (c)

5. (c) 6. (c)
7. (d) 8. (a)
9. (b) 10. (b)
11. (d)

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