Reference no: EM132659643

A company manufactures a single product for which the standard variable cost is

per unit

Direct material: 81 kg x $7 per kg 567

Direct labor: 97 hours x $8 per hour 776

Variable overhead: 97 hours x $3 per hour 291

1,634

Budget

Sales and production volume 81,600 units

Standard selling price $59 per unit

Standard variable cost $24 per unit

During January, 530 units were produced and the costs incurred were as follows:

Direct material: 42,845 kg purchased and used; cost $308,484

Direct labor: 51,380 hours worked; cost $400,764

Variable overhead: cost $156,709

Actual results

Sales and production volume 82,400 units

Actual selling price $57 per unit

Actual variable cost $23 per unit

Question (a) Calculate the following variances

(i) Direct material total variance

(ii) Direct labor rate variance

(iii) Direct labor efficiency variance

(iv) Sales price variance

(v) Sales volume contribution variance

Question (b) Discuss the three (3) Performance Levels in Standard Costing

Question (c) Discuss three (3) criticisms leveled against the appropriateness of Standard Costing in the Modern Environment