Variable Overhead Variance

PM – Nov 2015 – L2 – Q5 – Standard Costing and Variance Analysis

Calculate material, labour, and variable overhead variances, and discuss causes for variances in KOMERE Limited’s cost system.

Question

KOMERE Limited operates a Standard Costing System. Below are the standard and actual costs for October 2015:

Standard Cost Information:

Direct Material:

A: 20 kg at N100 per kg = N2,000
B: 30 kg at N80 per kg = N2,400

Direct Labour:

Skilled: 10 hours at N40 per hour = N400
Unskilled: 10 hours at N25 per hour = N400

Variable Overhead Cost:

10 hours at N20 per hour = N200

Total Standard Cost per unit = N5,250

Actual Results:

Direct Material:
- Material A: 105,000 kg purchased at N10,290,000; 99,000 kg consumed
- Material B: 148,000 kg purchased at N11,988,000; 144,000 kg consumed
Direct Labour:
- Skilled Labour: 56,000 hours at N2,352,000
- Unskilled Labour: 56,000 hours at N1,344,000
Variable Overhead: N1,064,000
Actual Production: 4,800 units

Required:

(a) Calculate all the relevant variances. (8 Marks)

(b) What are possible causes of the variances computed? (7 Marks)

Answer

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Tags: Direct Labour Variances, Direct Material Variances, Standard Costing, Variable Overhead Variance
Level: Level 2

Topic: Standard Costing and Variance Analysis
Series: NOV 2015

IMAC – JULY 2023 – L1 – Q3 – Standard Costing and Variance Analysis

Discuss differences between private and public sector entities and calculate standard costing variances for materials, labour, and overheads.

Question

a) Public Sector in Ghana includes the Metropolitan, Municipal and District Assemblies
(MMDA’s) and the Ministries, Departments and Agencies (MDA’s). The private sector
dominates in terms of numbers and are significantly different in operations from the public
sector.
Required:
In reference to the above statement, explain FOUR (4) key differences between a private
sector entity and a public sector entity. (10 marks)
b) Konka Ltd produces a product – “the telescope”.
Actual results for the period were:
Production: 430 units made
Materials: 1,075 kg were used.
1,200 kg of materials were purchased at a cost of GH¢17,700
Direct labour: 1,700 hours were worked at a cost of GH¢14,637
Variable production overheads expenditure: GH¢3,870.

The standard cost card for the product is as follows:
GH¢
Direct material 2 kg x GH¢15 30
Direct labour 4hrs x GH¢8.50 34
Variable overhead 4hrs x GH¢2.00 8
The cost card is based on production and sales of 450 units in each period.
The company values its inventories at standard cost.
Required:
Calculate the following variances for Konka Ltd:
i) Material price variance
ii) Material usage variance
iii) Labour rate variance
iv) Labour efficiency variance
v) Variable overhead expenditure variance
(10 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Labour Efficiency Variance, Labour Rate Variance, Material Price Variance, Material Usage Variance, Private Sector, Public Sector, Variable Overhead Variance
Level: Level 1

Topic: Standard Costing and Variance Analysis
Series: JULY 2023

PM – Nov 2015 – L2 – Q5 – Standard Costing and Variance Analysis

Calculate material, labour, and variable overhead variances, and discuss causes for variances in KOMERE Limited’s cost system.

Question

KOMERE Limited operates a Standard Costing System. Below are the standard and actual costs for October 2015:

Standard Cost Information:

Direct Material:

A: 20 kg at N100 per kg = N2,000
B: 30 kg at N80 per kg = N2,400

Direct Labour:

Skilled: 10 hours at N40 per hour = N400
Unskilled: 10 hours at N25 per hour = N400

Variable Overhead Cost:

10 hours at N20 per hour = N200

Total Standard Cost per unit = N5,250

Actual Results:

Direct Material:
- Material A: 105,000 kg purchased at N10,290,000; 99,000 kg consumed
- Material B: 148,000 kg purchased at N11,988,000; 144,000 kg consumed
Direct Labour:
- Skilled Labour: 56,000 hours at N2,352,000
- Unskilled Labour: 56,000 hours at N1,344,000
Variable Overhead: N1,064,000
Actual Production: 4,800 units

Required:

(a) Calculate all the relevant variances. (8 Marks)

(b) What are possible causes of the variances computed? (7 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Direct Labour Variances, Direct Material Variances, Standard Costing, Variable Overhead Variance
Level: Level 2

Topic: Standard Costing and Variance Analysis
Series: NOV 2015

IMAC – JULY 2023 – L1 – Q3 – Standard Costing and Variance Analysis

Discuss differences between private and public sector entities and calculate standard costing variances for materials, labour, and overheads.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Labour Efficiency Variance, Labour Rate Variance, Material Price Variance, Material Usage Variance, Private Sector, Public Sector, Variable Overhead Variance
Level: Level 1

Topic: Standard Costing and Variance Analysis
Series: JULY 2023

Question Tag: Variable Overhead Variance

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PM – Nov 2015 – L2 – Q5 – Standard Costing and Variance Analysis

Calculate material, labour, and variable overhead variances, and discuss causes for variances in KOMERE Limited’s cost system.

IMAC – JULY 2023 – L1 – Q3 – Standard Costing and Variance Analysis

Discuss differences between private and public sector entities and calculate standard costing variances for materials, labour, and overheads.

PM – Nov 2015 – L2 – Q5 – Standard Costing and Variance Analysis

Calculate material, labour, and variable overhead variances, and discuss causes for variances in KOMERE Limited’s cost system.

IMAC – JULY 2023 – L1 – Q3 – Standard Costing and Variance Analysis

Discuss differences between private and public sector entities and calculate standard costing variances for materials, labour, and overheads.

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PM – Nov 2015 – L2 – Q5 – Standard Costing and Variance Analysis

Calculate material, labour, and variable overhead variances, and discuss causes for variances in KOMERE Limited’s cost system.

You're reporting an error for "PM – Nov 2015 – L2 – Q5 – Standard Costing and Variance Analysis"

IMAC – JULY 2023 – L1 – Q3 – Standard Costing and Variance Analysis

Discuss differences between private and public sector entities and calculate standard costing variances for materials, labour, and overheads.

You're reporting an error for "IMAC – JULY 2023 – L1 – Q3 – Standard Costing and Variance Analysis"

PM – Nov 2015 – L2 – Q5 – Standard Costing and Variance Analysis

Calculate material, labour, and variable overhead variances, and discuss causes for variances in KOMERE Limited’s cost system.

You're reporting an error for "PM – Nov 2015 – L2 – Q5 – Standard Costing and Variance Analysis"

IMAC – JULY 2023 – L1 – Q3 – Standard Costing and Variance Analysis

Discuss differences between private and public sector entities and calculate standard costing variances for materials, labour, and overheads.

You're reporting an error for "IMAC – JULY 2023 – L1 – Q3 – Standard Costing and Variance Analysis"

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