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7.Lundi X Co manufactures a single product AB12. The standard cost card for the AB12 is given below.
$
Material 2.5 kg at $7 per kg 17.50
Labor 3 hours at $8.50 per hour 25.50
Variable overhead 12.00
Fixed overhead 6.00
total 61.00Standard selling prices is $84.00 and Lundi X have been budgeted to make and sell 4000 units per month.
In February the actual profit was $4,000 above budget. All variances have been calculated expect material usage.$
Selling price 1200 Adv
Sales volume margin 1150 Fav
Total labor 2100 Adv
Total variable overhead 1000 Fav
Total fixed overhead 2900 Fav
Material price 1200 FavLundi X uses absorption costing.
Calculate the following for February.
1. Budgeted profit $……………….
2. Material usage variance $………………. (Adv/Fav)Please do not simply type out full questions and expect to be provided with a full answer.
You must have an answer in the same book in which you found the question, so ask about whatever it is in the answer that you are not clear about and then I will explain.
I assume that you have watched my free lectures on variances, in which case you will know how to calculate the budgeted profit and will also know that the difference between the actual and budgeted profit is equal to the total of all of the variances.
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