Problem
ACME Incorporated has the following standard unit costs for a single product
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Direct material 12.0 Kg @ $1.65 per kg
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$19.80
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Direct labour 4 hours @ $21.50 per hour
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$86.00
|
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Variable manufacturing overhead 4 hours @ $16 per hour
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$48.00
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Actual data for the month is as follows:
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Direct materials purchased 19,600 Kg @ $1.75 per Kg
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$34,300
|
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Direct labour incurred 5,500 hours @ $22.70 per hour
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$124,850
|
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Variable manufacturing overhead incurred
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$86,240
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During the current month, 1,400 units were produced using 16,450 kg of material Variable manufacturing overhead is applied based on direct labour hours.
Task
Calculate the material, labour and variable manufacturing overhead variances for the month.
Show calculations and label variances (name of variance and favourable or unfavourable).