The following facts have been extracted from the standard cost card for product X:
Rs./unit
Variable overhead
4 machine hours @ Rs.8.00/hour 32.00
2 labour hours @ Rs. 4.00/ hour 8.00
Fixed overhead 20.00
During October 20X7, 5,450 units of the product were made compared with a budgeted production target of 5,500 units. The actual overhead costs incurred were:
Rs.
Machine-related variable overhead 176,000
Labour-related variable overhead 42,000
Fixed overhead 109,000
The original number of machine hours was 22,000 and the real number of labour hours was
10,800.
Requirements:
(a) Measure the overhead cost variances in as much detail as possible from the data given
(b) Describe the meaning of, and discuss the variable overhead variances that you have calculated. .