Calculate the materials price and usage variances

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Reference no: EM133119232

Question - Awford Industries manufactures sports equipment. One of its products (the Fratton) has the following standard costs per unit:

Cost Type

£



Material X (£2.25 per kg)

2.25

Material Y (£4.00 per kg)

8.00

Labour - skilled (£12.00 per hour)

3.00

Labour - unskilled (£7.00 per hour)

3.50

Variable overhead (Absorbed @ £6.00 per hour of skilled labour)

1.50

Total standard cost per Fratton

18.25

For the month of June, when 2,500 units of the Fratton were produced, production data was as follows:

Material purchased and used: X - 2,600 kgs @ £2.20 per kg; Y - 5,200 kgs @ £3.90 per kg.

Hours worked in producing 2,500 units of the Fratton: Skilled - 640 hours; Unskilled - 1,280 hours.

Actual variable overhead cost incurred £3,500.

At the beginning and end of the month Awford Industries had no stocks of any material, work-in-progress or finished product.

Required -

1) Calculate the materials price and usage variances?

2) Calculate the labour efficiency variance?

3) Calculate the variable overhead expenditure and efficiency variances?

Reference no: EM133119232

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