Question 1: Barbados has prepared the given standard cost information for its product Zeta:
Raw material 50 kg @2.5 125
Direct labor 14 hrs @ 4.75 66.50
Actual results for the period were recorded as shown below:
Production 150 units
Direct material purchased 7,000 kg @ a cost of Rs 18,200
Opening stock direct materials 1,300 kg
Closing stock direct materials 850 kg
Wages paid for 2020 hrs 9898
Required:
A) Compute:
a) Direct labor cost variance, analyzed into rate and efficiency variances.
b) Direct material cost variance, analyzed into price and usage variances.
B) In brief describe three of the causes of material price variance and labor rate variance.
Question 2:
A) In brief describe, supported by one illustration for each, what you understand by the given types of cost:
a) Variable cost
b) Fixed cost
c) Step cost
B) In brief explain four qualities of good accounting information.