ACCA · Question 37 · Standard Costing

Section B - Multi-Task Question 2 (Standard Costing)

Scenario: AeroDrone Manufacturing produces specialized drones. The standard cost card for one drone is:

• Materials: 2 kg of carbon fiber at $50 per kg
• Labor: 4 hours at $25 per hour
• Fixed Overhead: Absorbed at $10 per labor hour

Budgeted production was 1,000 drones.
Actual results for the period:

• Drones produced: 1,100
• Materials purchased and used: 2,300 kg costing $110,400
• Labor worked: 4,200 hours costing $109,200
• Fixed overheads incurred: $42,000

This MTQ contains 5 sub-tasks worth 2 marks each.

Task 1: Calculate the Material Price Variance.
Task 2: Calculate the Material Usage Variance.
Task 3: Calculate the Labor Rate Variance.
Task 4: Calculate the Labor Efficiency Variance.
Task 5: Calculate the Fixed Overhead Expenditure Variance.