Reference no: EM132543166

Standard cost systems provide companies with a number of advantages, argue the statement.

Following are the details of Abbass Industries for the period ended June 30, 2020. Company establish standard on its normal capacity of 120,000 units/hours in a year:

Direct Material 600,000 kgs at Rs. 9 per kg

Direct Labor 4 hours per unit at Rs. 6 per hour

Factory overhead:

Fixed cost Rs. 240,000 per year or Rs. 20,000 per month.

Variable Cost Rs. 4.50 Per hour.

During the one month of operation, company produced 11,000 units.

Direct material used: 60,500 kgs at Rs. 9.10 per kg

Direct labor used: 41,250 hours at Rs. 268,125

Actual variable Factory overhead Rs. 55,000

Required:

Question 1: Calculate the two variances for material, two variances for labor, and two variances for factory overhead.