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Budget Budget production units - 10 000 Budget sales units - 10 000 Standard...

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Accounting

Budget
Budget production units - 10 000
Budget sales units - 10 000
Standard cost for each unit of production -
Direct material A: 20 Kgs at R 5 per Kg
Direct material B: 10 Kgs at R 8 per Kg
Direct wages 6 hours at R 20 per hour
Fixed manufacturing costs R 100 000
Other non-manufacturing costs (fixed) R 20 000
The selling price has been budgeted at R 340 per unit
The actual results for the accounting period were as follows:
Actual production units - 12 000
Actual sales units - 8 000
Actual costs of production -
Direct material A: 226 000 Kgs at a total cost of R 1 152 600
Direct material B: 154 000 Kgs at a total cost of R 1 309 000
Closing stock of raw materials -
Direct material A: 10 000 Kgs
Direct material B: 10 000 Kgs
Direct wages 66 000 hours at a total cost of R 1 452 000
Fixed manufacturing costs R 80 000
Other non-manufacturing costs (fixed) R 22 000
The actual selling price was as per budget = R 340

You are required to analyse the following variances in Rand amounts and state whether they are favourable / unfavourable: 3.1 Material price variance (5) 3.2 Material mix variance (5) 3.3 Material yield variance (5) 3.4 Labour rate variance (5) 3.5 Labour efficiency variance (5)

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