Reference no: EM132561354

Oak plc uses a standard costing system. The following information relates to the company's Acorn product for the month of May.

                                                     Standard data                    Actual data

Sale volume (units)                                10,000                          9,700

Selling price                                        GH¢25.00                    GH¢26.50

Production

Material used per unit (Kg)                           1.50                           1.80

Material price per kg                                GH¢ 8.00                   GH¢8.30

Labour hour per unit                                    0.50                       0.75

Labour rate per hour                                 GH¢10.20                 GH¢11.50

Required:

Question a) a statement showing the budgeted profit and the actual profit for May.

Question b) Calculate the following variances:

i. Sales Price

ii. Sales Volume

iii. Materials Price

iv. Materials Usage

v. Labour Rate

vi. Labour Efficiency 

Question c) Outline the key factors that should be considered before deciding whether or not a variance should be investigated.