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Find and calculate direct material price and usage variance

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Reference no: EM132556402

ABC Ltd operates a standard variable costing system. Information relating to one of its products for the month just ended is given below:

Standard variable cost card             Per unit (Rs)

Selling price                                       150

Direct material 5 Kg at Rs. 10 per Kg        50

Direct labor 3 hours at Rs. 10 per hour       30

Variable production overhead 3 hours at Rs. 6.67 per hour 20

(Variable production overhead varies with direct labor hours)

Budgeted fixed production overhead per month is Rs. 250,000

Budgeted production and sales per month is 10,000 units.

Actual results for the month just ended are:

Units 1 1,000

                                                    Rs.

Sales                                       1,595,000

Direct material (58,000 Kg)             568,400

Direct labor (32,000 Hours)              352,000

Variable production overhead          198,000

Fixed production overhead              248,000

Question 1: You are required to calculate the variances below :

(i) Direct material price variance

(ii) Direct material usage variance

(iii) Direct labor rate variance

(iv) Direct labor efficiency variance

Reference no: EM132556402

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