Use the information provided below to calculate the following variance. state whether the variance is...

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Question

Accounting

Use the information provided below to calculate the following variance.

state whether the variance is favourable or unfavourable.

Material quantity variance

INFORMATION Royal Ltd uses the standard costing system. The standards and actual information for May 2022 for the only product that it manufactures are as follows:

standards

direct materials 4kg @ $7 per kg

direct labour 5 hours @ $ 60 per hour

variable manufacturing overheads R12 per labour hour

normal production 12 000 units per month

Actual information for May 2022:

Direct materials used 43 000kg @ $ 7.50 per kg

Direct labour 56 000 hours @ $58 per hour

Variable manufacturing overheads $649 600

Production 11 000 units manufactured

Answer & Explanation Solved by verified expert

0.0 Ratings ( Votes)

To calculate the Material Quantity Variance MQV we will follow these steps Step 1 Calculate the Standard Quantity of Materials for Actual Production The standard quantity of direct materials per unit is given as 4 kg Since 11000 units were produced we can calculate the total standard quantity of See Answer

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standards
direct materials	4kg @ $7 per kg
direct labour	5 hours @ $ 60 per hour
variable manufacturing overheads	R12 per labour hour
normal production	12 000 units per month

Actual information for May 2022:
Direct materials used	43 000kg @ $ 7.50 per kg
Direct labour	56 000 hours @ $58 per hour
Variable manufacturing overheads	$649 600
Production	11 000 units manufactured