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Answer to Question #86159 in Other Other for Faith

Question #86159
Tropical ltd produces powder soap for households use. The standard direct costs per carton containing 20 packets of one kg each is as follows:

Raw materials
15 kgs of tallons @ sh 10 per kg
10 kgs of caustic soda @ sh 16 per kg
Labour 20 hours @ 5 per hour

Packed materials
20 packets @ 50 cents each
1 carton @ sh 5 each

The monthly budget is per 1,000 cartons. The overhead expenses which are all Fixed are budgeted at sh 40,000 and selling price per 1kg packet of soap is sh
25. the following details relate to October 2007 when 1,200 cartons of soap
Were produced and sold

Ksh
Sales 1,200 cartons 552,000
Raw materials:
Tallow 10,800 kgs 129,600
Caustic soda 13200 kgs 198,000
Labour; 26,400 hours 145,200
Fixed overhead expenditure 42,000

REQUIRED: calculate

a) Price and usage variances each raw materials.
b) Labour rate and efficiency variances.
c) Sales price and volume variances.
d) Overhead expenditure variances.
Expert's answer
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