- Tropical ltd produces powder soap for households use. Thestandard direct costs per carton containing 20 packets of one kgeach is as follows:
Raw materials
15 kgs of tallons @ sh 10 per kg
10 kgs of caustic soda @ sh 16 perkg
Labour 20 hours @ 5 per hour
Packed materials
20 packets @ 50 cents each
1 carton @ sh 5 each
The monthly budget is per 1,000cartons. The overhead expenses which are all Fixed are budgeted atsh 40,000 and selling price per 1kg packet of soap is sh 25. thefollowing details relate to October 2007 when 1,200 cartons ofsoap
Were produced and sold
Ksh
Sales 1,200cartons 552,000
Raw materials:
Tallow 10,800kgs 129,600
Caustic soda 13200kgs 198,000
Labour; 26,400hours 145,200
Fixed overheadexpenditure 42,000
REQUIRED: calculate
- Price and usage variances each rawmaterials.
- Labour rate and efficiencyvariances.
- Sales price and volumevariances.
- Overhead expenditurevariances.
