QUESTION 3 Jato Ltd produces and sell a special product called Jata Cement. The standard cost of the product is as follo

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Question 3 Jato Ltd Produces And Sell A Special Product Called Jata Cement The Standard Cost Of The Product Is As Follo 1 (39.54 KiB) Viewed 10 times

QUESTION 3 Jato Ltd produces and sell a special product called Jata Cement. The standard cost of the product is as follows: 30 Direct Material (3kg @ GH¢10) Direct Labour (2hrs @ GH¢15) Variable Overhead (2hrs @ GH¢5) 30 10 12 Fixed Overhead (2hrs @ GH¢6) Total Unit cost 82 Additional information: Projected production and sales units are 2,500 and 2,250 respectively. The standard selling price is GHe 120. Actual performance is presented as follows: Production units 2,250 Sales @ GH¢125 GH₂2,150 Bought and used 5,625kg of Direct material GH 53,437.50 4,500 Direct labour hours GH¢ 63,000 GH€ 24,750 Variable overheads Fixed Overhead GH 30,000 Required: A) Determine the following i) Material Price Variance ii) Material Usage Variance Total material variance iv) Labour Rate Variance v) Labour Efficiency Variance vi) Total labour variance vii) Variable overhead expenditure variance viii) Variable overhead efficiency variance ix) Sales price variance Sales volume variance B) i) What is variance analysis? ii) Mention three causes of material variance?