ACCA · Question 37 · Standard Costing

SECTION B - MULTI-TASK QUESTION 2 (STANDARD COSTING)

A biotech firm uses standard costing for its main chemical compound.
Standard data per liter of output:

• Material: 2 kg at $10 per kg = $20
• Labor: 0.5 hours at $30 per hour = $15

Actual data for the period:

• Output produced: 5,000 liters
• Material purchased and used: 10,500 kg at a total cost of $102,900
• Labor worked: 2,600 hours at a total cost of $79,300

Provide the following 5 answers (each worth 2 marks). State 'A' for Adverse or 'F' for Favorable:

1. Calculate the material price variance.
2. Calculate the material usage variance.
3. Calculate the total material variance.
4. Calculate the labor rate variance.
5. Calculate the labor efficiency variance.