FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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 Following are the details of Exceed Battery Company for the period ended June 30, 2020.

Company established standard on its normal capacity of 120,000 units/ hours in a year:

Direct Material             600,000 kgs at Rs. 9 per kg

                        Direct Labor                4 hours per unit at Rs. 6 per hour

                        Factory overhead:

                                    Fixed cost        Rs. 240,000 per year or Rs. 20,000 per month.

                                    Variable Cost    Rs. 4.50 per hour.

 

During the one month of operation, company produced 11,000 units.

                        Direct material used:                             60,500 kgs at Rs. 9.10 per kg

                        Direct labor used:                                 41,250 hours at Rs. 268,125

                        Actual Variable Factory overhead          Rs. 55,000

Required:

                        Calculate the following variances:

  1. Material quantity variance.
  2. Material price variance.
  3. Labor efficiency variance.
  4. Labor rate variance.
  5. Factory overhead controllable variance.
  6. Factory overhead volume variance.
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