Using the same old example from the previous posting of Standard Costing, I expanded the exercises and it looks like below
Example:
Setandet Kos Sdn Bhd manufactures mobile phone by the name of oPhone. Below is the budgeted cost information of oPhone for the month of October 2018 based on the budgeted production and sales of 5,000 units.
RM
Direct material:
Plastic casings (10,000 kg) 600,000
Wires (10,000 meters) 120,000
Direct labour (8,000 hours) 240,000
Variable overhead 100,000
Fixed overhead 60,000
The variable overhead cost is absorbed based on direct labour hours while the fixed overhead cost is absorbed based on number of units produced. The standard selling price of oPhone is RM1,200 per unit.
The actual data for
the month is as follows:
Units produced and sold 6,000
Selling price per unit RM1,000
Direct material:
Plastic casings purchased and
used 12,500 kg@ RM58 per kg
Wires purchased and used 10,750 meters @ RM10 per meter
Direct labour 10,000
hours @ RM22 per hour
Variable overhead cost RM120,000
Fixed overhead cost RM60,000
Analyse
the following:
i)
Direct
material price variance for plastic casings
ii)
Direct
material usage variance for wires
iii)
Direct
labour rate variance
iv)
Direct
labour efficiency variance
v)
Variable
overhead expenditure variance
vi)
Variable
overhead efficiency variance
vii)
Fixed
overhead expenditure variance
viii)
Fixed
overhead volume variance
ix)
Sales
margin price variance
x)
Sales
margin volume variance
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