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further variance

Yyaaseen12y ago
a company manufactures a single product. An extract from a variance control report together with relevant standard cost data is shown below. standard s.p per unit $70 Standard d.m cost(5kg * $2per kg) $10 per unit Budgeted total material cost of sales $2300 per month budgeted profit margin $6900 per month Actual results sales revenue $15200 Total direct material cost $2400 DMPV $800 adverse DMUV $400 favourable no change in inventory levels Q1 what was the actual production in february?? A 200 B 217 C 240 D 280 Q2 what was the actual usage of direct material during february?? A 800kg B 1000 C 1200 D none of these Q3 what was the SPV for february?? A $120F B 900A C1200A D1200F Q4 what was the sales volume profit variance?? A$900F B1200F C900A D2100A i'm having difficulties with the workings :/
John MoffatJohn MoffatTutor12y ago#1
Q1: if actual material cost is 2400, then standard material cost will be 2400 - 800 + 400 = 2000. Standard cost per unit is $10. So number of units is 2000/10 = 200. Q2: Standard usage for actual production = 200 x 5kg = 1000 kg. Usage variance is $400 favourable. Since standard cost per kg is $2 it means that they used 400/2 = 200 kg less than standard. 1000 - 200 = 800 kg. Q3: Since there is no change in inventory, sales units = production = 200 units. At standard selling price should be 200 x $70 = 14000. Actual revenue is 15200. So variance is 1200 (F) Q4: Budget production and sales = 2300/10 = 230 units. Standard profit per unit = 6900 / 230 = $30 per unit. Actual sales are 200 units. So sales volume variance = 30 units x $30 = $900 (A)
Yyaaseen12y ago#2
thank you sir :)
John MoffatJohn MoffatTutor12y ago#3
You are welcome :-)
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