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STANDARD COSTING VARIANCE QUESTION – 1 Zincet Co, a manufacturing firm, operates a standard costing system. It makes a single product, ZIN, using a single raw material CET. Standard costs relating to ZIN have been calculated as follows. Standard cost schedule – ZIN Per unit (RM) Direct material, CET, 50 kg at RM15 per kg 750 Direct labour, 8 hours at RM10 per hour 80 Variable overhead, 8 hours at RM4 per hour 32 Total standard costs 862 The standard selling price of a ZIN is RM1,000 and Zincet Co produces 2,000 units a month. During October 2021, 1,800 units of ZIN were produced. Relevant details of this production are as follows: Direct material CET – 88,000 kg costing RM1,232,000 were bought and used. Direct labour – 14,000 hours were worked during the month and total wages were RM133,000. - Variable production overhead – The actual cost of the month was RM70,000. Inventories of the direct material CET are valued at the standard price of RM15 per kg. Each ZIN was sold for RM1,075. Required: Calculate the following for the month of October 2021. (a) Direct material cost variances, analysed into price and usage variances. (b) Direct labour cost variances, analysed into rate and efficiency variance. (c) Variable production overhead variances, analysed into expenditure and efficiency variance.

STANDARD COSTING VARIANCE QUESTION – 1 Zincet Co, a manufacturing firm, operates a standard costing system. It makes a single product, ZIN, using a single raw material CET. Standard costs relating to ZIN have been calculated as follows. Standard cost schedule – ZIN Per unit (RM) Direct material, CET, 50 kg at RM15 per kg 750 Direct labour, 8 hours at RM10 per hour 80 Variable overhead, 8 hours at RM4 per hour 32 Total standard costs 862 The standard selling price of a ZIN is RM1,000 and Zincet Co produces 2,000 units a month. During October 2021, 1,800 units of ZIN were produced. Relevant details of this production are as follows: Direct material CET – 88,000 kg costing RM1,232,000 were bought and used. Direct labour – 14,000 hours were worked during the month and total wages were RM133,000. - Variable production overhead – The actual cost of the month was RM70,000. Inventories of the direct material CET are valued at the standard price of RM15 per kg. Each ZIN was sold for RM1,075. Required: Calculate the following for the month of October 2021. (a) Direct material cost variances, analysed into price and usage variances. (b) Direct labour cost variances, analysed into rate and efficiency variance. (c) Variable production overhead variances, analysed into expenditure and efficiency variance.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 31P: Misterio Company uses a standard costing system. During the past quarter, the following variances...
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STANDARD COSTING VARIANCE QUESTION – 1 Zincet Co, a manufacturing firm, operates a standard costing system. It makes a single product, ZIN, using a single raw material CET. Standard costs relating to ZIN have been calculated as follows. Standard cost schedule – ZIN Per unit (RM) Direct material, CET, 50 kg at RM15 per kg 750 Direct labour, 8 hours at RM10 per hour 80 Variable overhead, 8 hours at RM4 per hour 32 Total standard costs 862 The standard selling price of a ZIN is RM1,000 and Zincet Co produces 2,000 units a month. During October 2021, 1,800 units of ZIN were produced. Relevant details of this production are as follows: Direct material CET – 88,000 kg costing RM1,232,000 were bought and used. Direct labour – 14,000 hours were worked during the month and total wages were RM133,000. Variable production overhead – The actual cost of the month was RM70,000. Inventories of the direct material CET are valued at the standard price of RM15 per kg. Each ZIN was sold for RM1,075. Required: Calculate the following for the month of October 2021. (a) Direct material cost variances, analysed into price and usage variances. (b) Direct labour cost variances, analysed into rate and efficiency variance. (c) Variable production overhead variances, analysed into expenditure and efficiency variance. (d) Selling price variance. (e) Sales volume contribution variance. (f) Variable production cost variance.
Transcribed Image Text:STANDARD COSTING VARIANCE QUESTION – 1 Zincet Co, a manufacturing firm, operates a standard costing system. It makes a single product, ZIN, using a single raw material CET. Standard costs relating to ZIN have been calculated as follows. Standard cost schedule – ZIN Per unit (RM) Direct material, CET, 50 kg at RM15 per kg 750 Direct labour, 8 hours at RM10 per hour 80 Variable overhead, 8 hours at RM4 per hour 32 Total standard costs 862 The standard selling price of a ZIN is RM1,000 and Zincet Co produces 2,000 units a month. During October 2021, 1,800 units of ZIN were produced. Relevant details of this production are as follows: Direct material CET – 88,000 kg costing RM1,232,000 were bought and used. Direct labour – 14,000 hours were worked during the month and total wages were RM133,000. Variable production overhead – The actual cost of the month was RM70,000. Inventories of the direct material CET are valued at the standard price of RM15 per kg. Each ZIN was sold for RM1,075. Required: Calculate the following for the month of October 2021. (a) Direct material cost variances, analysed into price and usage variances. (b) Direct labour cost variances, analysed into rate and efficiency variance. (c) Variable production overhead variances, analysed into expenditure and efficiency variance. (d) Selling price variance. (e) Sales volume contribution variance. (f) Variable production cost variance.
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