- March 27, 2022 at 10:37 am #652019nhungoc1809Member
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The standard cost per unit of one of The Gift Label’s products is provided below:
Material 5kg @ £2kg 10
Labor 1 hour @ £15/hr 15
Variable overheads 1 hour @ £8/hr 8
Budgeted production and sales for February are 2,000 units selling for £70 each. Annual budgeted fixed overheads are £336,000 incurred evenly each month.
Actual results for February are as follows:
2,100 units were made and sold at a price that was 10% less than the budget. The cost of material was £22,680 and there was a favourable usage variance of 0.5kg per unit because better quality material was used. Labor worked 2,058 hours and labor rate increased to £16 beginning February. Variable and fixed overheads were £15,435 and £24,300 respectively.
Complete the table below to generate the opening statement for February:
Make one entry (favourable or adverse) for each variance and enter a zero or dash in the other column.
Enter the net total of favourable variance (positive number) or adverse variance (negative number) in the final column.
Favourable (£) Adverse ( £)
Sales volume variance
Sales price variance
Variable cost variance
Variable overhead expenditure
Variable overhead efficicency
Total variable cost budgeted
Fixed overhead budgeted
Fixed overhead expenditure variance
Actual profitMarch 27, 2022 at 5:42 pm #652052John MoffatKeymaster
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There is no point in typing out a full question and expecting to be provided with a full answer.
Unless you have been set this as a test question (and if so, then we certainly do not do your homework for you 🙂 ) then you must have an answer in the same book in which you found the question. So ask about what you are not clear about in the answer and then I will explain.
Everything needed to be able to answer this question is explained in my free lectures. The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
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