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I would to ask how to find the budgeted units & actual units for below questions was given ?
selling price $150 per unit
direct material 2kg @$25/kg = $50 per unit
direct labour 3 hours @$10 per hour = $30 per unit
fixed overhead 2 hours @$10 per hour = $20 per unit
profit $50budgeted profit $600,000
sales volume variance $60,000 adv
standard profit on actual sales $540,000
sales price variance $20,000 fav
total $560,000
production cost variance
material price $7500 F
material usage $8000 A
labour rate $2000 A
labour efficiency $500 F
fixed overhead expenditure $7000 A
fixed overhead volume $2000 Atotal 11,000 A
actual profit $54,900thank you
hi sir,
please correct me the below calculation to get the budgeted & actual units :
budgeted unit : budgeted profit $600,000 / $50 = 12,000 units ?
actual unit : standard profit on actual sales $540,000 / $50 = 10,800 units ?thank you
thank you for the reply
can you please refer above question again, the below question ask :
Q 1.
actual units sold were : 400 less than / 400 more than / 1200 less than / 1200 more than
budgeted and actual sales revenue was : 1640 / 1600 / 549 / 560 ?my answer ;
actual units sold were 1200 less than budgeted and
actual sales revenue was $ ?
( I could not work out the answer? )Q 2.
production was : 100 units more / 2000 units more / 100units less / 350units more than budgeted ?
how to get the answer ?Q 3.
material caused the biggest cost variance , where a decision to pay : less that / more than , standard price resulted in the company using : 320 kg less than original / 320 kg more than flexed / 320 less than flexed / 320 more than original budget .how to get the answer ? what does mean decision to pay ? flexed mean in actual production ? and budgeted is cannot change?
I have take 8000 A / $25 = 300kg is actual usage used over the budget ? therefore is 7500 A?Q 4
In the last month actual selling price was : equal to / higher than / lower than , standard ?
my answer is higher than, is correct ?thank you
hi sir , sorry for Q3 typing error ,
I have take 8000 A / $25 = 320kg is actual usage used over the budgeted? therefore is 8000 A?thank you
1. 1200 units less is correct.
You know what the standard revenue on the actual sales is (you know the actual units and you know the standard selling price). Since the sales price variance is 20,000 favourable, the actual revenue must be 20,000 higher than the standard revenue.2. The fixed overhead volume variance occurs because they produced more or less than budget. It is the difference between actual production and budget production, costed at the fixed overhead per unit.
3. They budgeted on paying $25 per kg of material. They may have made a decision to buy more expensive material or to buy cheaper material (most likely because better material might mean less waste, cheaper material might mean more waste).
You know from the materials price variance that they paid less than they budgeted.
The flexed budget means the standard purchases for the actual production. The original budget was standard purchases for budgeted production.
320 is correct.
Q1
actual unit sold were 1200 less than budgeted :
because budgeted units 12,000 – actual units 10,800 = 1200 units ?and actual sales revenue was 1640? because actual units sold 10800 x $150 =$1620000 + $20000 F = $1640000 ? therefore 1640 should be correct as actual sales revenue.
Q2
production was : should be 100 units less budgeted ?
because the variance 2000 A / $20 per units = 100 units means that standards are not met the budgeted ?
( understand costed at fixed overhead $20 per unit)Q3
material usage $8000 adverse , because 320kg in flexed budget the usage used more than original budget plan?material price variance is $7500 F , therefore material caused the biggest cost variance , where a decision to pay is less than the original budget and not a more than ?
Q4
actual selling price higher than standard because :
sales price variance is Favourable of $20,000?
which is actual sold units 10800 x $150=$1620000 + $20000 F ?please correct me the above , thank you
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