Yohan makes a single product. His business operates a standard costing system. All goods produced...
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Accounting
Yohan makes a single product. His business operates a standard costing system. All goods produced in the month are sold and no inventories are held.
Budgeted monthly production and sales for April 2017 were 3000 units.
The standard costs per unit were as follows:
-Direct material 3 kilos at $1.50 per kilo
-Direct labour 0.8 hours at $2.30 per hour
The actual results for April were as follows :
| Production and sales | 3400 units |
| Material used | 9000 units |
| Material cost | $ 14000 |
| Labour hours | 1800 |
| Labour cost | $ 6100 |
Required
(a) Calculate the following variances:
-
(i) Material price variance
-
(ii) Material usage variance
-
(iii) Labour rate variance
-
(iv) Labour efficiency variance
(b) Suggest one reason for each of the variances calculated in (a) above.
Additional Information
The standard selling price per unit is $10. A 5% discount was given to all customers in April.
Required (c) Calculate the actual profit made by Yohan for April
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