The Following Standard Costs Were Developed for One of the Products

question 34

Essay

The following standard costs were developed for one of the products of Larry Ltd.:
The following information is available regarding the company's operations for the period:
Budgeted fixed manufacturing overhead for the period is £960,000, and the standard fixed overhead rate is based on expected capacity of 80,000 direct labour hours.
Required:

a.
Calculate the materials price variance.
b.
Calculate the materials usage variance.
c.
Calculate the direct labour rate variance.
d.
Calculate the direct labour efficiency variance.
e.
Calculate the variable manufacturing overhead spending (expenditure) variance.
f. Calculate the variable manufacturing overhead efficiency variance.
g. Calculate the fixed manufacturing overhead spending (expenditure) variance.

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Definitions:

Weathered Rock

Rock that has been changed physically or chemically by the action of weather, water, or biological organisms.

Precipitation

Any form of water - liquid or solid - falling from the sky, including rain, snow, sleet, and hail.

Karst

A landscape formed from the dissolution of soluble rocks such as limestone, characterized by sinkholes, caves, and underground rivers.

Iron and Aluminum

Essential metals abundant in the Earth's crust, often forming various minerals and playing crucial roles in industrial applications.