Direct material (6 kgs at RM4 per kg) Direct labour | (1 hour at RM7 per hour) Variable production overhead (1 direct labour hour at RM3) 24 7 ww ww 34 In July, 18,500 bottles were produced. A total of 113, 500 kgs for the costs of RM442,650 of direct materials were purchased and used. The direct labour costed RM129,940 for a total of 17,800 direct labour hours worked. Actual variable production overhead costs incurred was RM58,800. ww

Question

From the foregoing information, compute the following variances and indicate whether they are favorable (F) or unfavorable (U). State why each of the variances occurred.

  1. Material price variance and Material usage variance
  2. Direct labour rate variance and Direct labour efficiency variance
  3. Variable overhead spending variance and Variable overhead efficiency variance                                                                        
Direct material
(6 kgs at RM4 per kg)
Direct labour
| (1 hour at RM7 per hour)
Variable production overhead
(1 direct labour hour at RM3)
24
7
ww ww
34
In July, 18,500 bottles were produced. A total of 113, 500 kgs for the costs of RM442,650 of direct
materials were purchased and used. The direct labour costed RM129,940 for a total of 17,800
direct labour hours worked. Actual variable production overhead costs incurred was RM58,800.
ww
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Transcribed Image Text

Direct material (6 kgs at RM4 per kg) Direct labour | (1 hour at RM7 per hour) Variable production overhead (1 direct labour hour at RM3) 24 7 ww ww 34 In July, 18,500 bottles were produced. A total of 113, 500 kgs for the costs of RM442,650 of direct materials were purchased and used. The direct labour costed RM129,940 for a total of 17,800 direct labour hours worked. Actual variable production overhead costs incurred was RM58,800. ww

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