II. HB Corporation in Delaware, U.S., makes and sells a single product. The company operates a standard costing system and a just-in-time purchasing and production system. No inventory of raw materials or finished goods is held. Details of the budget and actual data for the previous period are given below: Budget data Standard production costs per unit (currency in U.S. dollar, $): 8kg at the rate of $10.80 per kg 1.25 hours at the rate of $18.00 per hour Variable overheads 1.25 hours at the rate of $6.00 per direct labor hour Direct material 86.40 Direct labor 22.50 7.50 Standard selling price: $180 per unit Budgeted fixed production overheads: $170 000 Budgeted production and sales: 10 000 units Actual data Direct material: 74 000kg at the rate of$11.20 per kg Direct labor: 10,800 hours at the rate of$19.00 per hour Variable overheads: $70,000 Actual selling price: $184 per unit Actual fixed production overheads: $168 000 Actual production and sales: 9000 units Requirements 1. Prepare a statement using marginal costing principles that reconciles the budgeted profit and the actual profit. Your statement should show the variances in as much detail as possible.
II. HB Corporation in Delaware, U.S., makes and sells a single product. The company operates a standard costing system and a just-in-time purchasing and production system. No inventory of raw materials or finished goods is held. Details of the budget and actual data for the previous period are given below: Budget data Standard production costs per unit (currency in U.S. dollar, $): 8kg at the rate of $10.80 per kg 1.25 hours at the rate of $18.00 per hour Variable overheads 1.25 hours at the rate of $6.00 per direct labor hour Direct material 86.40 Direct labor 22.50 7.50 Standard selling price: $180 per unit Budgeted fixed production overheads: $170 000 Budgeted production and sales: 10 000 units Actual data Direct material: 74 000kg at the rate of$11.20 per kg Direct labor: 10,800 hours at the rate of$19.00 per hour Variable overheads: $70,000 Actual selling price: $184 per unit Actual fixed production overheads: $168 000 Actual production and sales: 9000 units Requirements 1. Prepare a statement using marginal costing principles that reconciles the budgeted profit and the actual profit. Your statement should show the variances in as much detail as possible.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:I.
HB Corporation in Delaware, U.S., makes and sells a single product. The company
operates a standard costing system and a just-in-time purchasing and production
system. No inventory of raw materials or finished goods is held. Details of the
budget and actual data for the previous period are given below:
Budget data
Standard production costs per unit (currency in U.S. dollar, $):
Direct material
Direct labor
Variable overheads 1.25 hours at the rate of $6.00 per direct labor hour
8kg at the rate of $10.80 per kg
1.25 hours at the rate of $18.00 per hour
86.40
22.50
7.50
Standard selling price: $180 per unit
Budgeted fixed production overheads: $170 000
Budgeted production and sales: 10 000 units
Actual data
Direct material: 74 000kg at the rate of $11.20 per kg
Direct labor: 10,800 hours at the rate of $19.00 per hour
Variable overheads: $70,000
Actual selling price: $184 per unit
Actual fixed production overheads: $168 000
Actual production and sales: 9000 units
Requirements
1.
Prepare a statement using marginal costing principles that reconciles the
budgeted profit and the actual profit. Your statement should show the variances
in as much detail as possible.
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