Martin Company manufactures and sells a chemical compound for industrial use. The following information was available at the beginning of 2017:

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(iv) Labour efficiency (v) Variable overhead rate (vi) Variable overhead efficiency (b) Discuss four possible causes for each of the following variances: (i) Materials usage (ii) Labour efficiency (c) Explain how you would determine wch variance to examine further in relation to a work performance?

Martin Company manufactures and sells a chemical compound for industrial use. The following information was available at the beginning of 2017: Standard selling price £1,170.00 Estimated production & sales (units) 2,025 Estimated direct materials (27 Kilograms at £10.00 per Kg.) £270.00 Estimated direct labour (20 hours at £7.00 per hour) £140.00 Estimated variable manufacturing overhead (15 hours at £5.00 per hour) £75.00 At the end of 2017, Martin Company established the following actual figures: Production & sales 1,725 units sold for £1,210.00 per unit Direct materials  63,000 Kg. at £9.00 per Kg. Direct wages 45,000 hours at a total cost of £432,000 Variable manufacturing overhead 31,050 hours at a total cost of £ 230,000 (a) Calculate the following variances and indicate whether the variances are adverse or favourable: (i)  Materials price (ii)  Materials usage (iii)  Labour rate (iv)  Labour efficiency (v)  Variable overhead rate (vi)  Variable overhead efficiency (b) Discuss four possible causes for each of the following variances: (i)  Materials usage (ii)  Labour efficiency (c) Explain how you would determine wch variance to examine further in relation to a work performance?

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