New Motion Ltd. manufactures a single product which has selling price is £ 120 perunit. The monthly budget units are 1000 units. £ Direct material 20 units @ £3 per unit60 Direct labour 3 hours @ £5 per hour 15 Variable overheads 5 hours @ £2 per hour10 Fixed overheads 5 hours @ £1 per hour 590 Actual figures for the month ofSeptember are as follows: Production 1,200 units Direct material 23,000 units @ £ 4per unit Direct Wages 3,500 hours @ £ 5.2 Variable overheads £ 11,000 Fixedoverheads £ 6,000 Required: Calculate the material, labour and overhead variancesfor the month of September and prepare summary of variances report withexplanation referred to responsibility persons for the variances.

Name: New Motion Ltd. manufactures a single product which has selling price
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Description: New Motion Ltd. manufactures a single product which has selling price is £ 120 perunit. The monthly budget units are 1000 units. £ Direct material 20 units @ £3 per unit60 Direct labour 3 hours @ £5 per hour 15 Variable overheads 5 hours @ £2 per ho

ParticularsVariance AmountResponsibiltyDirect Material Rate Variance23,000 (Unfavourable)Purchase…

Business

Accounting

overheads £ 6,000 Required: Calculate the material, labour and overhead variances for the month of September and prepare summary of variances report with explanation referred to responsibility persons for the variances.

overheads £ 6,000 Required: Calculate the material, labour and overhead variances for the month of September and prepare summary of variances report with explanation referred to responsibility persons for the variances.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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New Motion Ltd. manufactures a single product which has selling price is £ 120 per
unit. The monthly budget units are 1000 units. £ Direct material 20 units @ £3 per unit
60 Direct labour 3 hours @ £5 per hour 15 Variable overheads 5 hours @ £2 per hour
10 Fixed overheads 5 hours @ £1 per hour 590 Actual figures for the month of
September are as follows: Production 1,200 units Direct material 23,000 units @ £ 4
per unit Direct Wages 3,500 hours @ £ 5.2 Variable overheads £ 11,000 Fixed
overheads £ 6,000 Required: Calculate the material, labour and overhead variances
for the month of September and prepare summary of variances report with
explanation referred to responsibility persons for the variances.

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