Refreshers Limited specialises in making fresh juices by hand with organic fruits. The company has...
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Accounting
| Refreshers Limited specialises in making fresh juices by hand with organic fruits. The company has developed the following standard costs: | |||||
| Standard quantity or hours | Standard price or rate | ||||
| Direct material | 1.3 | kg | $6.00 | per litre | |
| Direct labour | 0.6 | hours | $19.00 | per hour | |
| Variable overhead | 0.6 | hours | $3.00 | per hour | |
| During April, Refreshers Limited made 4,100 bottles of fresh juice and used 5,380 kg of direct material and 2,540 direct labor-hours. In total, 6,000 kg of direct material was purchased during the month at $5.80 per kg. The actual direct labor rate was $19.80 per hour and the actual variable overhead rate was $2.90 per hour. | |||||
|
Variable overhead is applied based on direct labor-hours. | |||||
| Compute the following: | |||||
A) Labour efficiency variance
B) Labour rate variance
C) Variable overhead rate variance
D) Variable overhead efficiency variance
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