Tropical ltd produces powder soap for households use. The standard direct costs per carton containing 20 packets of one kg each is as follows:
15 kgs of tallons @ sh 10 per kg
10 kgs of caustic soda @ sh 16 per kg
Labour 20 hours @ 5 per hour
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
a) Price and usage variances each raw materials.
b) Labour rate and efficiency variances.
c) Sales price and volume variances.
d) Overhead expenditure variances.
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