Pacific Bhd, a manufacturing company currently uses a standard absorption costing system for the electronic...
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Accounting
Pacific Bhd, a manufacturing company currently uses a standard absorption costing system for the electronic products which it manufactures in its plant. The following information for last month has been extracted from the companys records:
Standard unit cost data:
Direct materials 13 kg at RM6 per kg
Direct labour 5 hours at RM20 per hour
Fixed production overhead RM30 per hour
Budgeted output 5,400 units
Actual results for last month:
Quantity of material used in production 62,000 kg
Fixed production overhead RM815,225
The following variances have been reported.
Direct Material Price Variance
RM62,000 (A)
Direct Labour Rate Variance
RM11,313 (A)
Direct Material Usage Variance
RM29,700 (F)
Direct Labour Efficiency Variance
RM11,200 (F)
REQUIRED:
Calculate for last month:
i. Actual units produced
ii. Actual price per kg of direct material
iii. Actual direct hours worked
iv. Actual rate per hour of direct labour
v. Prove the direct material cost variance
(b) Calculate the following fixed overhead variance:
i. Expenditure variance
ii. Volume capacity variance iii. Volume efficiency variance
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