Standard Costing System Assignment
February 24th, 2020
2.2 REQUIRED
Study the information provided below and calculate the following variances for September 2017:
2.2.1 Raw materials usage variance (4)
2.2.2 Variable overheads efficiency variance (4)
2.2.3 Direct labor rate variance (4)
2.2.4 Direct labor efficiency variance (4)
N.B. Your answers must indicate whether the variance is favorable or unfavorable
INFORMATION
Cile Ltd uses the standard costing system. The standards per unit for manufacturing Product Tutu are as follows:
| Material | 4 kilograms at R6 per kilogram |
| Labour | 5 hours at R60 per hour |
| Variable overheads | R20 per labor hour |
| Normal production | 25 000 units per month |
Actual information for the month of September 2017:
| Material | 82 000 kilograms at R5.80 per kilogram |
| Labour | 102 000 hours at R65 per hour |
| Variable overheads | R22 per labor hour |
| Production | 20 000 units |
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