Please provide solution to the below problem:
Costing problem
- suppose that 4 kgs of material A are required to make one unit of product TS, each kilogram costing Rs.10. It takes direct labour 5 hours to make one unit of product TS. The labour force is paid Rs.4.50 per hour.
During the period the following results were recorded.
Material A: 8,200 kgs purchased on credit* Rs.95000
Material A: kgs issued to production* 8200 kgs
Units of product TS produced* 1600
Direct labour hours worked* 10000
Cost of direct labour* Rs.32000
Required:
(a) Calculate the following variances for the period.
· Material price variance
· Material usage variance
· Labour rate variance
· Labour efficiency variance
(b) Prepare journal entries for the transactions marked * above, together with the variances calculated in (a).
You should make the following assumptions
· An integrated accounting system is maintained
· There are no opening or closing stocks of work in progress.
Please mail the solution to psrinivas1 @ in.com
CAclubindia
