Question

	Lido Company's standard and actual costs per unit for the most recent period, during which 400 units were actually produced, are given below:
			Standard	Actual
	Materials:
		Standard: 2 metres at $1.50 per m.	$3.00
		Actual: 2.1 metres at $1.60 per m.		$3.36
	Direct Labour:
		Standard: 1.5 hours at $6.00 per hr.	$9.00
		Actual: 1.4 hours at $6.50 per hr.		$9.10
	Variable overhead:
		Standard: 1.5 hours at $3.40 per hr.	$5.10
		Actual: 1.4 hours at $3.10 per hr.		$4.34
	Total Unit Cost:		$17.10	$16.80
	There were no inventory of materials at the beginning or end of the period.
	Required:
	(a)	Materials price variance
	(b)	Materials quantity variance
	(c)	Direct labour rate variance
	(d)	Direct labour efficiency variance
	(e)	Variable overhead spending variance
	(f)	Variable overhead efficiency variance

Answer 1

	Standard			Actual
Particulars	Qty/ hours	Rate	amount	Qty/ hours	Rate	amount
Materials	800.00	1.50	1,200.00	840.00	1.60	1,344.00
Labour	600.00	6.00	3,600.00	560.00	6.50	3,640.00
Overhead	600.00	3.40	2,040.00	560.00	3.10	1,736.00
Actual output	400.00
DMPV = (SP-AP)*AQ purchased
DMPV = (1.5 - 1.60)840
DMPV = 84 U
DMQV= (SQ-AQ)SP
DMQV= (800 - 840)1.5
DMQV= 60 U
DLRV= (SR-AR)AH
DLRV= (6 - 6.50)560
DLRV= 280 U
DLEV = (SH-AH)SR
DLEV = (600 - 560)6
DLEV = 240 F
VORV = (SR-AR)AH
VORV = (3.4 - 3.1)560
VORV = 168 F
VOEV = (SH-AH)SR
VOEV = (600 -560)3.4
VOEV = 136 F