- Question 5 15 Marks 27 Minutes Eastern Cape Steel Pty Ltd Ecs Is A Company That Manufactures Steel Railway Tracks 1 (26.65 KiB) Viewed 41 times
2. Calculate the total material volume variance
3.Calculate the direct labour rate variance
4. Calculate the direct labour efficiency variance
5 Calculate the variable overhead expenditure variance
6Calculate the variable overhead efficiency variance
Question 5 [15 marks; 27 minutes] Eastern Cape Steel (Pty) Ltd (ECS) is a company that manufactures steel railway tracks. They manufacture only type of railway track and operate a standard variable costing system. The standard variable cost for 1 metre of railway track is provided below for the 2022 financial year end 30 April 2022: Direct materials Iron @R20/kg R100,00 R80,00 Tin @R80/kg Carbon @R55/kg Direct labour R55,00 Direct @R8/hr R16,00 Manufacturing overheads Variable R6,00 Total Standard variable cost per metre R257,00 Variable overheads are absorbed based on labour hours. At the end of the 2022 financial year ended 30 April 2022, the following financial information was available: PRODUCTION INFO Budget Actual Units produced in metres 8 000 6 000 MATERIAL INFO Tin Carbon Purchased kg's R/kg Used in production kg's LABOUR INFO Rate actually paid per hour Total Actual Direct labour cost Actual variable overhead cost Iron 20 500 R21,00 19 250 R8,50 R125 375.00 R14 250 4 275 R75,00 4 275 5 625 R55,00 5 625