Reference no: EM132976041

Question - Calibrii Garden produces and sells manufactures clay pots in one size but different colour and desing. Each pot requires the same amount of resources. Calibri provides you the static budget for 2020:

Expected production and sales 64 000 units

Direct materials 96 000 kg

Direct manufacturing labour 32 000 hours

Total fixed costs $150 000

The information about direct materials and direct manufacturing labour is as follows:

Standard quantity Standard price

Direct materials 1.5 kilograms $2.50 per kilogram

Direct manufacturing labour 0.5 hour $25 per hour

In 2020 Calibri Garden produced and sold 70 000 units of terracotta pots. The direct materials cost spent was $282 975, on 115 500 kg purchased. During 2020 direct labour hours used were 42 000, with the total of direct manufacturing labour costs spent were $903 000. Actual fixed costs were $170 000, and there was no beginning or ending inventories.

Calculate and show workings:

1. Calculate the sales-volume and flexible-budget variance for direct material.

2. Calculate the sales-volume and flexible-budget variance for direct manufacturing labour.

3. Calculate the sales-volume and flexible-budget variance for fixed costs.

4. Calculate price and efficiency variances for direct materials.

5. Calculate price and efficiency variances for direct manufacturing labour.