(b) State what is meant by the term 'variance analysis'. Y Limited produces one product.Budgeted units produced and sold for the month of July were 1000.Further budgeted information for July was also available.$Sales250 000Direct material ($12 per kilo)(60 000)(100 000)Direct labour ($25 per labour hour)Fixed overhead(24 000)Budgeted profit66 000Fixed overhead is to be absorbed on the basis of direct labour hours.The actual units produced and sold for July were 1120.

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Business

Accounting

(b) State what is meant by the term 'variance analysis'.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

(b) State what is meant by the term 'variance analysis'.

Y Limited produces one product.
Budgeted units produced and sold for the month of July were 1000.
Further budgeted information for July was also available.
$
Sales
250 000
Direct material ($12 per kilo)
(60 000)
(100 000)
Direct labour ($25 per labour hour)
Fixed overhead
(24 000)
Budgeted profit
66 000
Fixed overhead is to be absorbed on the basis of direct labour hours.
The actual units produced and sold for July were 1120.

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