Determine the total labour variance, Managerial Accounting

Assignment Help:

Problem:

Fancy Foods Ltd uses a standard costing system to control its material and labour costs. The standard costs for January 2007 were as follows.

Standard Costs
Materials     0.5 kg per unit £10 per kg    £5
Labour        1 hour at £8 per hour           £8

They were expecting to produce 200 units in January 2007, whereas they actually produced 210 units. The actual costs incurred were

Actual Costs

Materials     110 kgs at a total cost of £1045
Labour        220 hours at a total cost of £1815

a) Determine the total material variance and its two sub variances, the material price variance and the material usage variance.

b) Give two possible reasons for the causes of the material price variance and two possible reasons for the usage variance that you have calculated in part above.

c) Determine the total labour variance and its two sub variances, the labour rate variance and the labour efficiency variance.

d) Give two possible reasons for the causes of the labour rate variance and two possible reasons for the causes of the efficiency variances that you have calculated in part (c) above.

e) Describe how the causes of labour variances and the material variances may be linked.


Related Discussions:- Determine the total labour variance

Contigency theory, CONTIGENCY THEORY Some researchers have argued that ...

CONTIGENCY THEORY Some researchers have argued that the context in which budgetary control is used is as important as the style in which it is implemented and used. This is ter

Explain about cost centre, Explain about Cost centre: Meaning & defini...

Explain about Cost centre: Meaning & definition: cost centre is defined as a location, person or item of equipment (or group of them) in respect which costs may be ascertaine

Accounting Ratios, Explain TWO limitations of using accounting ratios to as...

Explain TWO limitations of using accounting ratios to assess the performance of a firm and suggest how each limitation may be improved

Continuous probability distribution, CONTINUOUS PROBABILITY DISTRIBUTION (U...

CONTINUOUS PROBABILITY DISTRIBUTION (USE OF NORMAL DISTRIBUTION) In reality the C-V-P variables might take any values in a continuous range. It could therefore be more appropriat

Management, Discuss the different roles played by the qualitative and quant...

Discuss the different roles played by the qualitative and quantitative approaches to managerial decision making

Determine the nature of accounting, The Nature of Accounting Accounti...

The Nature of Accounting Accounting is process of recording, analyzing, summarizing, and interpreting financial (money-related) activities to allow individuals as well as org

Participative budgets- budgetary styles, Participative Budgets In this ap...

Participative Budgets In this approach to budgeting, budgets are developed by lower level managers who then submit them to their superiors. The budgets depend on the lower level

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd