Question - Plastic Packaging CC produces and sells a single product of which its standard cost is as follows: Direct material 10 litres @ N$ 3.00 per kilogram Direct labour 3 hours @ N$ 5.00 per hour Variable overheads 3 hours @ N$ 3.00 per hour Fixed production overhead N$ 15.00 per unit The variable overhead is incurred in direct proportion to the direct labour hours worked. The unit rate for fixed production overhead is based on an expected annual output of 36 000 units produced at an even rate throughout the year. Assume that each calendar month is equal and that the budgeted sales volume for October 2017 is 2 500 units. The following were actual results recorded during October 2017. Number of units produced and sold 2 000 units Sales revenue N$ 250 000 Direct materials: 15 000 litres purchased and used N$ 43 500 Direct labour: 6 500 hours N$ 35 750 Variable overhead N$ 18 850 Fixed production overhead N$ 46 000
REQUIRED: Compute the following variances:
Material price variance.
Material quantity variance.
Direct labour rate variance.
Direct labour efficiency variance.