Labour-intensive production operating standard absorption

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Reference no: EM13775616

A labour-intensive production unit operating a standard absorption cost accounting system provides the following information for period 10:

Normal capacity, in direct labour hours 9,600

Budgeted variable production overheads Rs 3 per direct labour hour

Budgeted fixed production overheads per four-week Rs 120,000

Financial period

To produce one unit of output takes two hours of working.

Actual figures produced for the four-week period 10 were:

Production, in units 5,000

Variable production overheads incurred Rs 28,900

Fixed production overheads incurred Rs 118,000

Actual direct labour hours worked 9,300

You are required to calculate, in accordance with the 1996 edition of the Institute's Terminology, the following variances:

(a) variable production overhead expenditure variance,

(b) variable production overhead efficiency variance,

(d) fixed production overhead volume variance.

Reference no: EM13775616

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