Use the information provided below to calculate the following variance. state whether the variance is...
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Accounting
Use the information provided below to calculate the following variance. state whether the variance is favourable or unfavourable.
Labour efficiency variance
Royal Ltd uses the standard costing system. The standards and actual information for May 2022 for the only product that it manufactures are as follows:
standard:
direct materials
4kg @ $7 per kg
direct labour
5 hours @ $ 60 per hour
variable manufacturing overheads
R12 per labour hour
normal production
12 000 units per month
Actual information for May 2022:
Direct materials used
43 000kg @ $ 7.50 per kg
Direct labour
56 000 hours @ $58 per hour
Variable manufacturing overheads
$649 600
Production
11 000 units manufactured
Direct materials used 43 000kg @ $ 7.50 per kg Direct labour 56 000 hours @ $58 per hour Variable manufacturing overheads $649 600 Production 11 000 units manufactured
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