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Sir please help me with the following questions in variances :
1.
The following information relates to labour costs for the past month:Budget: Labour rate $10 per hour
Production time 15,000 hours
Time per unit 3 hours
Production Units 5000 unitsActual: Wages paid $176000
Production 5500 units
Total hours worked 14000 hoursThere was no idle time.
What were the labour rate and efficiency variances?
Rate Variance Efficiency variance
A. $26000 (A) $25000 (F)
B. $26000 (A) $10000 (F)
C. $36000 (A) $2500 (F)
D. $36000 (A) $25000 (F)2.
Fawley’s direct labour cost data relating to last month were as follows:Standard labour cost of actual hours worked $116,000
Standard hours worked 30000
Standard rate per hour $4
Labour rate variance $5800 (Favourable)
Labour efficiency variance $4000 (Favourable)Find out the actual rate of pay per hour(to 2 decimal places)
The Following question relates to Questions 3 and 4:
The standard direct material cost for a product is $50 per unit (12.5 kg at $4 per Kg). Last month the actual amount paid for 45,600 kg of material purchased and used was $173,280 and the direct material usage variance was $15,200 adverse.
3.
What was the direct material price variance last month?A. $8800 adverse
B. $8800 Favourable
C. $9120 Adverse
D. $9120 favourable4.
What was the actual production last month?A. 3344 units
B. 3520 units
C. 3952 units
D. 4160 units5.
For product DR, the material price variance for the month of August was $1000 Favourable and the material usage variance was $300 adverse.The standard material usage per unit is 3kg, and the standard material price $2 per kg.
500 units were produced in the period. Opening inventories of raw materials were 100 kg and closing inventories 400kg.What were the material purchases in the period?
1 They worked 14000 hours. At standard cost this would have cost $140,000. They actually paid $176000 so there is an adverse variance of $36000
the standard time for the actual production is 5500 x 3 = 16500 hours. They actually worked 14000: 2500 hours less. So the efficiency variance is 2500 x $10 = $25000 favourable
3 they actually bought 45600kg, so at standard cost they should have paid 45600 x 4 = $182400. They actually paid 173280, so a favourable variance of 9120.
4 since the usage variance is 15200, it means that they actually used 15200/4 = 3800kg more than they should have used for the actual production. they actually used 45600kg, so they should have used 45600 – 3800 = 41800kg. since std usage is 12.5 kg per unit, they must have produced 41800/12.5 = 3344 units
5.
M.P.V=&1000F, indicates standard material purchased -actual material purchased = 1000, which means $2*material purchased -actual material purchased =$1000—————1
M.U.V=$300A, indicates actual usage-standard usage=300/2=150kg,which means actual usage=3*500+150=1650kg
opening material=100kg, closing material= 400kg, so material purchased=1650+400-100=1950kg———————————————————-2combine 1 and 2, actual material purchased=$2*1950-$1000=$2900
Dear John Sir, am I right?
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