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Baskerville Cereals manufactures dog biscuits. The standard costs and revenues of each tonne of their most popular product is as follows: Selling price Materials Labour Variables production overheads Fixed production costs £160 per tonne 1.2 tonnes @ £30 per tonne 2 hours @£22.50 per hour 2 hours @£10 per hour £175,000 Budgeted production and sales for the month of January 2018 were 25,000 tonnes. Fixed overheads are absorbed on the basis of budgeted units. In fact, 26,500 tonnes were produced and sold for £4,160,500. Costs incurred were as follows: Materials Labour Variable production overheads Fixed production overheads £956,915 £1,270,940 £606,320 £164,000 30,475 tonnes 58,300 hours Required: Calculate the following Variances: Sales Price & Volume Variances using contribution approach. 2. Material Price & Efficiency variance. 3. Labor rate and efficiency variance. 1.

Baskerville Cereals manufactures dog biscuits. The standard costs and revenues of each tonne of their most popular product is as follows: Selling price Materials Labour Variables production overheads Fixed production costs £160 per tonne 1.2 tonnes @ £30 per tonne 2 hours @£22.50 per hour 2 hours @£10 per hour £175,000 Budgeted production and sales for the month of January 2018 were 25,000 tonnes. Fixed overheads are absorbed on the basis of budgeted units. In fact, 26,500 tonnes were produced and sold for £4,160,500. Costs incurred were as follows: Materials Labour Variable production overheads Fixed production overheads £956,915 £1,270,940 £606,320 £164,000 30,475 tonnes 58,300 hours Required: Calculate the following Variances: Sales Price & Volume Variances using contribution approach. 2. Material Price & Efficiency variance. 3. Labor rate and efficiency variance. 1.

FINANCIAL ACCOUNTING
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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Baskerville Cereals manufactures dog biscuits. The standard costs and revenues of each tonne of their most popular product is as follows: Selling price Materials Labour Variables production overheads Fixed production costs £160 per tonne 1.2 tonnes @ £30 per tonne 2 hours @ £22.50 per hour 2 hours @£10 per hour £175,000 Budgeted production and sales for the month of January 2018 were 25,000 tonnes. Fixed overheads are absorbed on the basis of budgeted units. In fact, 26,500 tonnes were produced and sold for £4,160,500. Costs incurred were as follows: Materials Labour Variable production overheads Fixed production overheads 30,475 tonnes 58,300 hours £956,915 £1,270,940 £606,320 £164,000 Required: Calculate the following Variances: 1. Sales Price & Volume Variances using contribution approach. 2. Material Price & Efficiency variance. Labor rate and efficiency variance. Variable OH price and etficiency Variance. 3. 4. 5. Fixed Overhead spending variance.
Transcribed Image Text:Baskerville Cereals manufactures dog biscuits. The standard costs and revenues of each tonne of their most popular product is as follows: Selling price Materials Labour Variables production overheads Fixed production costs £160 per tonne 1.2 tonnes @ £30 per tonne 2 hours @ £22.50 per hour 2 hours @£10 per hour £175,000 Budgeted production and sales for the month of January 2018 were 25,000 tonnes. Fixed overheads are absorbed on the basis of budgeted units. In fact, 26,500 tonnes were produced and sold for £4,160,500. Costs incurred were as follows: Materials Labour Variable production overheads Fixed production overheads 30,475 tonnes 58,300 hours £956,915 £1,270,940 £606,320 £164,000 Required: Calculate the following Variances: 1. Sales Price & Volume Variances using contribution approach. 2. Material Price & Efficiency variance. Labor rate and efficiency variance. Variable OH price and etficiency Variance. 3. 4. 5. Fixed Overhead spending variance.
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