Task 1.6 - Assessment 1 and 2 (B and C)

Sample assessment one Task 1.6 (b) workings:-
Flexed Standard cost 6000 units x 1.6 kg x £14.50 (per kg) = 139,200
Actual material price per kg = £142560 / 9900 kg = 14.4
Actual material used per item = 9900kgs / 6000 units = 1.65kg
Price variance = actual quantity at actual price minus actual quantity at budget (standard) price = 142560 - (9900 kg x £14.50) = 143,550 = 990 Favourable (the standard price is higher than the actual)
Usage variance = actual usage at std price minus standard usage at std price (9900 x £14.50) = 143550 - (6000 x 1.6 kg x £14.50) = 139200 = 4350 Adverse

Total Cost variance = The difference between the standard (budgeted) cost of 6000 units and the actual cost. 139200 - 142560 = 3360 (this is also the total of the other two variances)
Cost variance percentage = variance / budget (standard) = 3360/139200 x100 = 2.4%

Task 1.6 (c) workings:
First you need to flex the labour budget to the correct number of items made as follows:-
Budgeted time for one item = 0.2 hour - budgeted hours for actual production = 18800 x 0.2 =3760 x budgeted rate = £18 (divide the budgeted cost with the budgeted hours:- 65880 /3660)
Therefore standard labour cost of production = 67680
Labour rate variance =
Actual hours x actual rate - actual hours x budget rate = 82720 - (4700 hours x £18 per hour) 84600 = 1880 Favourable
Labour efficiency variance =
Actual hours at budget rate - standard hours at budget rate = 84600 - (3760 x £18) = 67680 Adverse

Remember that budget means standard - I have interchanged these words.

I have only included the solution for the assessment number one, if you need any more help please let me know.