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Calculate the difference or variance in direct labour

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Reference no: EM132806567

MnM Chocolate calculates the COGS using standard cost of goods. To produce 1 bar of chocolate, the ingredients needed are:

chocolate 3gr, Rp. 150 = Rp. 450
beans 1gr, Rp. 100 = Rp. 100
sugar 1gr, Rp. 50 = Rp. 50

During March, 2.050 chocolate bars were produced with the components of

chocolate 6.100gr, Rp. 150
beans 2.000gr, Rp. 90
sugar 1.900gr, Rp. 60

Additional Info:

Material Cost Variance: Rp 21,000
Material Usage Variance: Rp 20,000
Material Yield Variance: Rp 15,000

  • It is assumed that to produce one chocolate bar, it takes 0.03 Direct Labor Hours at a wage rate of Rp. 5,000 / Direct Labour Hours and 0.02 Machine Hours with a Factory Overhead (FOH) rate of Rp. 12,500 (Variable Rate Rp. 7,500 and Fixed Rate Rp. 5,000). The actual working hours are 62 hours, with a real wage rate of Rp. 5,500 /Direct Labour Hours and the actual FOH is Rp. 500,000 for 42 Machine Hours.
  • Normal capacity is 40 Machine Hours

Required:

Problem a. Calculate the standard cost of goods per chocolate bar

Problem b. Calculate the difference/Variance in Direct Labour and analyze it into Labour Rate Variance (LRV), Labour efficiency variance (LEV) and Labour Yield Variance (LYV)

Problem c. Calculate the difference/Variance in FOH and analyze into Overhead Controllable Variance, Overhead Volume Variance and Total Variable Overhead Variance.

Reference no: EM132806567

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