a) 

i)        Material price                    

Standard cost of material used (95,420 litres x $17.00) = 1,622,140 

Actual cost of material used                            1,479,010        

Variance                                               143,130 (F)

Material usage

Standard quantity for actual production (13,200 units x 7 litres) = 92,400

Actual quantity used                                95,420

Variance                              3,020

At standard cost per unit x $17.00       $51,340 (A)

ii)      Labour rate

Standard cost of labour used 141,550 hours x $13.40 = 1,896,770     

Actual cost of labour used                           1,898,035        

Variance                                               $1,265 (A)

Labour efficiency

Standard hours for actual production 13,200 units x 11= 145,200

Actual quantity used                                141,550

Variance                              3,650

At standard cost per unit x $13.40                 $48,910(F)       

iii)    Fixed overhead expenditure variance

Budgeted volume 5,184,900/370.35 =14,000

Budgeted fixed overhead (14,000 x 11 x $9.45)     1,455,300

Actual fixed overhead                                       1,400,000

                                                                   $55,300 (F)

Fixed overhead volume variance    

Budgeted volume                         14,000  

Actual volume                           13,200  

                                                 800

At standard overhead absorption rate per unit x $103.95= $83,160 (A)

Fixed overhead capacity variance

 Actual hours of input                    141,550

Budgeted hours of input                  154,000

                                                 12,450  

At standard rate per hour x $9.45= $117,652.50 (A)

Fixed overhead efficiency variance

Standard hours to produce actual output     145,200  

Actual hours to produce output                          141,550  

                                                            3,650

At standard rate per hour x $9.45=$34,492.50 (F)

b)   Reconciliation statement of standard and actual cost

                                                      $

Standard cost of production (13,200 x 370.35)        4,888,620

Material variances

Material price                                    143,130 F

Material usage                                 51,340 A

Labour variances

Labour rate                                        1,265 A

Labour efficiency                                   48,910 F

Fixed overhead variances        

Fixed overhead expenditure                      55,300 F

Fixed overhead capacity                       117,652.50 A

Fixed overhead efficiency                   34,492.50F

Actual cost of production                                4,777,045