Chapter 18 solutions

18.15
a) Idle time = unproductive hours (5 500x std labour rate
(R5 400 000/60000hours)=R495 000 unfavourable
b) Labour efficiency variance = (std productive hours –
actual productive hours) x std labour rate
[(14 650 x 60 000hours/15 000units) –
56 000]xR90=R234 000 favourable
18.16
Total variance for the period = R2 000A
Note that overheads capacity and overhead efficiency
variance are sub-variances of the volume variance, so only
the volume variance should be taken into account.
Budgeted profit – total adverse variance = actual profit
R27 000 + R5 000 - R3 000) =R29 000 (d)
18.17
a) Sales price variance = (actual margin – budgeted
margin) x actual sales volume
(R170 – R120) x 8200 = R410 000F
Note that std fixed overhead rate per unit is R40
(R348 000/8700) OR
Sales price variance = (actual selling price – budgeted
selling price) x actual sales volume
(R310 – R260) x 8200 = R410 000F (ii)
b) Sales volume = (actual sales volume – budgeted sales
volume) x standard gross profit per unit
(8200 – 8700) x R120 = R60 000A (Note that standard gross
profit per unit is R120 ( R260 – R100 – R40) (i)
c) Fixed overhead volume = (actual production – budgeted
production) x standard fixed overhead rate
(8200 – 8700) x R40 = R20 000A (i)

18.18
Material price and usage
( c ) and ( d )

18.19
The difference between standard profit on actual sales (as
per the flexible budget) and fixed budget profit (as per the
original budget) is the sales volume variance
R120 000 standard profit on actual sales + R10 000
adverse sales volume variance = R130 000 fixed budget
profit ( c )

18.20
Sales volume variance (evaluation would change from
standard contribution to standard gross profit) (b)

18.21
Total variance = - R900 + R1 000 – R700 + R500 + R900 =
R800F
Budgeted profit + R800 favourable variance = R40 000
actual profit
Budget profit = R39 200 (b)