Reference no: EM132566774
Question - March Inc. produces and sells one product. The budgeted (standard) cost for one unit follows:
Budgeted Cost per unit of output
Direct materials 5 kg @ $1.50 per kg
Direct Labour 4 hrs @ $15.00 per hour
Factory overhead (allocated based on direct labour hours)
Variable 4 hrs @ $5.00 per hour
Normal activity per month 8,000 direct labour hours
The actual data for the current month is:
Units produced and sold 1,800 units
Direct materials purchased 10,200 kg @ $1.48 per kg
Direct materials used 9,500 kg
Direct labour costs for the month $122,100
Direct labour pay rate $16.50 per hour
Actual hours 7,400 hours
Total variable overhead costs $26,000
REQUIRED - Calculate the following variances. You must correctly identify the amount of the variances and if they are F (favorable) or U (unfavorable).
a) Static Budget Variance
b) Flexible Budget Variance
c) Sales Volume Variance
d) Direct material rate variance
e) Direct material efficiency variance
f) Direct labour rate variance
g) Direct labour efficiency variance
h) Variable overhead rate variance
i) Variable overhead efficiency variance