Neelopak Berhad prepared the standard cost data for one of their products. Direct Labour (0.65 hours @ RM11) RM7.15 Direct Materials (5 meters @ RM5) RM25 Variable Overhead (0.65 hours @ RM7) RM4.55 Fixed Overhead (0.65 hours @ RM3) RM1.95 Standard cost per unit RM38.65 There is the actual cost data information: Production 7,500 unit Direct materials used (23500 meter) RM124,550 Direct materials purchasing (24,000 meter) RM132,000 Direct labor (3000 hours) RM34,500 Variable overhead RM21,600 Fixed overhead RM7,800 Budgeted activities are 2,600 hours. You are required to calculate: i) Variance of direct materials price ii) Variance of direct materials used iii) Variance of direct labor charge rate

Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter6: Process Cost Accounting—additional Procedures; Accounting For Joint Products And By-products
Section: Chapter Questions
Problem 3E: The following data appeared in the accounting records of Craig Manufacturing Inc., which uses the...
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Neelopak Berhad prepared the standard cost data for one of their products.
Direct Labour (0.65 hours @ RM11) RM7.15
Direct Materials (5 meters @ RM5) RM25
Variable Overhead (0.65 hours @ RM7) RM4.55
Fixed Overhead (0.65 hours @ RM3) RM1.95
Standard cost per unit RM38.65
There is the actual cost data information:
Production 7,500 unit
Direct materials used (23500 meter) RM124,550
Direct materials purchasing (24,000 meter) RM132,000
Direct labor (3000 hours) RM34,500
Variable overhead RM21,600
Fixed overhead RM7,800
Budgeted activities are 2,600 hours.
You are required to calculate:
i) Variance of direct materials price
ii) Variance of direct materials used
iii) Variance of direct labor charge rate
iv) Variance of direct labors’ efficiency
v) Variance of variable overhead expenses
vi) Variance of variable overhead’s efficiency
vii) Variance of fixed overhead expenses
viii) Variance of fixed overhead volume 

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