Solution-Calculate the direct labour rate variance

Calculate the direct labour rate variance

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Reference no: EM133094404

Question - Harold Enterprise makes a single type of product. The company operates a standard costing system. The standard production cost for 2021 is based upon a budgeted annual production of 12,000 units. Production is expected to be spread evenly throughout the 12 calendar months. At the start of 2021, there were no inventory of finished goods or work-in-progress.

Unit standard cost data for 2021 is:

Direct material 6kg @ RM13 kg

Direct labour 3 hours @ RM12 hour

Budgeted fixed overhead, to be incurred evenly for 2021 is:

Production RM216,000

Administration, selling and distribution RM120,000

At the end of January 2021, the following actual data is recorded:

Units produced 920

Units sold 850

Sales revenue 134,000

Material used in production 73,400

Direct labour 32,030

Fixed production overhead 17,840

Fixed administration, selling and distribution overhead 10,780

Efficiency ratio 92%

Required - For January 2021, calculate the direct labour rate variance.

Reference no: EM133094404

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Calculate the direct labour rate variance

Reference no: EM133094404

Reference no: EM133094404

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