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Jones plc manufactures one product, and the entire product is sold as soon as it is produced. There are no opening or closing inventories and work in progress negligible. The company operates a standard costing system and analysis of variances is made every month. The standard cost card for a product is as follows. 0.5 kilos at£4 per kilo 2 hours at £8.00 per hour 2 hours at£0.30 per hour Direct Materials Direct Wages Variable Overheads Standard Variable Cost Standard Contribution Standard Selling Price Budgeted output for the month of June 2015 was 5,100 units. Actual results for June 2015 were as follows: £ 2.00 16.00 Actual operating hours amounted to 8,000 hours. Variable Overheads amounted to £2,600. .60 18.60 13.40 32.00 Production of 4,850 units was sold for £150,350. Materials consumed in production amounted to 2,300 kgs at a total cost of £9,800. Labour hours paid for amounted to 8,500 hours at a cost of £67,800.

Jones plc manufactures one product, and the entire product is sold as soon as it is produced. There are no opening or closing inventories and work in progress negligible. The company operates a standard costing system and analysis of variances is made every month. The standard cost card for a product is as follows. 0.5 kilos at£4 per kilo 2 hours at £8.00 per hour 2 hours at£0.30 per hour Direct Materials Direct Wages Variable Overheads Standard Variable Cost Standard Contribution Standard Selling Price Budgeted output for the month of June 2015 was 5,100 units. Actual results for June 2015 were as follows: £ 2.00 16.00 Actual operating hours amounted to 8,000 hours. Variable Overheads amounted to £2,600. .60 18.60 13.40 32.00 Production of 4,850 units was sold for £150,350. Materials consumed in production amounted to 2,300 kgs at a total cost of £9,800. Labour hours paid for amounted to 8,500 hours at a cost of £67,800.

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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Question

Calculate the Variable overhead variances  and prepare an operating statement for the month ended
June 2015 as per the tables provided below. 

Variable overhead variances

£

Favourable (F)/ Adverse (A)

Variable overhead rate variance:

 

 

 

 

 

 

 

 

 

 

 

Variable overhead efficiency variance:

 

 

 

 

 

 

 

 

 

 

 

Total Variable overhead variance

 

 

Operating Statement (OP):

 

 

Standard OP

Variances

Actual OP

 

£

£

£

£

£

Sales

 

 

 

 

 

Direct materials

 

 

 

 

 

Direct labour

 

 

 

 

 

Variable overheads

 

 

 

 

 

Total variable expenses

 

 

 

 

 

Contribution

 

 

 

 

 

 

Question 3 Jones plc manufactures one product, and the entire product is sold as soon as it is produced. There are no opening or closing inventories and work in progress is negligible. The company operates a standard costing system and analysis of variances is made every month. The standard cost card for a product is as follows. 0.5 kilos at£4 per kilo 2 hours at £8.00 per hour Variable Overheads 2 hours at£0.30 per hour Direct Materials Direct Wages Standard Variable Cost Standard Contribution Standard Selling Price Budgeted output for the month of June 2015 was 5,100 units. Actual results for June 2015 were as follows: £ 2.00 16.00 .60 18.60 13.40 32.00 Production of 4,850 units was sold for £150,350. Materials consumed in production amounted to 2,300 kgs at a total cost of £9,800. Labour hours paid for amounted to 8,500 hours at a cost of £67,800. Actual operating hours amounted to 8,000 hours. Variable Overheads amounted to £2,600.
Transcribed Image Text:Question 3 Jones plc manufactures one product, and the entire product is sold as soon as it is produced. There are no opening or closing inventories and work in progress is negligible. The company operates a standard costing system and analysis of variances is made every month. The standard cost card for a product is as follows. 0.5 kilos at£4 per kilo 2 hours at £8.00 per hour Variable Overheads 2 hours at£0.30 per hour Direct Materials Direct Wages Standard Variable Cost Standard Contribution Standard Selling Price Budgeted output for the month of June 2015 was 5,100 units. Actual results for June 2015 were as follows: £ 2.00 16.00 .60 18.60 13.40 32.00 Production of 4,850 units was sold for £150,350. Materials consumed in production amounted to 2,300 kgs at a total cost of £9,800. Labour hours paid for amounted to 8,500 hours at a cost of £67,800. Actual operating hours amounted to 8,000 hours. Variable Overheads amounted to £2,600.
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