## Answers

For Material and Labor

Standard | Actual | ||||||||||

Qty | Rate | Amount | Qty | Rate | Amount | ||||||

Material | 112,000 X 2 | 224,000 | 10.00 | 2,240,000 | Material | 188,000 | 10.362 | 1,948,000 | |||

Labour | 112,000 X 0.5 | 56,000 | 36 | 2,016,000 | Labour | 46,400 | 41.16 | 1,910,000 | |||

4,256,000 | 3,858,000 |

Here are the calculations

Efficiency variance = (Actual Qty - Standard Qty) X Standard Rate

Rate variance = (Actual Rate - Standard Rate) X Actual Qty

Material

Efficiency variance = (188,000 - 224,000) X 10 = (360,000) Favorable

Rate variance = (10.362 - 10) X 188,000 = 68,000 Unfavorable

Labor

Efficiency variance = (46,400 - 56,000) X 36 = (345,600) Favorable

Rate variance = (41.16 - 36) X 46,400 = 239,600 Unfavorable

Variable Overhead

Efficiency variance = (46,400 - 56,000) X 80 = (768,000) Favorable

Rate variance = (86.85 - 80) X 46,400 = 318,000 Unfavorable

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