Answer to Question #299819 in Accounting for Safu

Question

The budgeted and standard data for productivity include the following

Direct labour

Ten employees work for 45 hour a week. The standard rate of pay is ksh 4 per hour. Output per hour is 40 kg of the product.

Direct material

Material quantity kg price per kg

X 60 2.00

Y 40 1.00

Z 100 1.40

From this standard matrix 180 kg of product is expected

Actual data for first week in April were as follows

Hours worked 45

Rate of pay ksh 4 per hour

Overhead incurred ksh 5400

Output 1980 kg

Production and consumption of materials were as follows:

Material Quantity (kg)

X 700

Y 440

Z 1120

Required

Calculate the following direct material variance for each material (10mks)

Total

Price

Usage

mix

Calculate the direct labor efficiency variance (10mks)

Answer 1

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