Owe plc manufactures one product, and the entire product is sold as soon as it is produced. 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. Materials (4 Kg at £4.50 per kg) Labour (5 Hours at £5 per hr) Variable overheads (5 hrs at £2 per hr) Fixed overheads (5 hrs at £3 per hr) Budgeted selling price is £75 per unit Budgeted production Budgeted sales There is no opening inventory The actual results are as follows: Sales: 8,400 units for £613,200 Production: 8,900 units Actual costs: Materials (35,464 kg): £163,455 Labour: € 224,515 Variable overheads: € 87,348 Fixed overheads: £ 134,074 £ per Unit 18 25 10 15 £68 8.700 units 8,000 units Required: a) Prepare a flexed budget and calculate the total variances b) Using the data, analyse each of the cost variances: Materials; Labour; Variable Overheads and; Fixed Overheads c) Using data, calculate the Sales price variance and the Sales volume variance
Owe plc manufactures one product, and the entire product is sold as soon as it is produced. 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. Materials (4 Kg at £4.50 per kg) Labour (5 Hours at £5 per hr) Variable overheads (5 hrs at £2 per hr) Fixed overheads (5 hrs at £3 per hr) Budgeted selling price is £75 per unit Budgeted production Budgeted sales There is no opening inventory The actual results are as follows: Sales: 8,400 units for £613,200 Production: 8,900 units Actual costs: Materials (35,464 kg): £163,455 Labour: € 224,515 Variable overheads: € 87,348 Fixed overheads: £ 134,074 £ per Unit 18 25 10 15 £68 8.700 units 8,000 units Required: a) Prepare a flexed budget and calculate the total variances b) Using the data, analyse each of the cost variances: Materials; Labour; Variable Overheads and; Fixed Overheads c) Using data, calculate the Sales price variance and the Sales volume variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Hi any chance I coudl have this solved and explained please? thank you so much
Transcribed Image Text:Owe plc manufactures one product, and the entire product is sold as soon as it is
produced. 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.
Materials (4 Kg at £4.50 per kg)
Labour (5 Hours at £5 per hr)
Variable overheads (5 hrs at £2 per hr)
Fixed overheads (5 hrs at £3 per hr)
Budgeted selling price is £75 per unit
Budgeted production
Budgeted sales
There is no opening inventory
The actual results are as follows:
Sales: 8,400 units for £613,200
Production: 8,900 units
Actual costs:
Materials (35,464 kg): £163,455
Labour: € 224,515
Variable overheads: € 87,348
Fixed overheads: € 134,074
£ per Unit
18
25
10
15
£68
8.700 units
8,000 units
Required:
a) Prepare a flexed budget and calculate the total variances
b) Using the data, analyse each of the cost variances: Materials; Labour;
Variable Overheads and; Fixed Overheads
c) Using data, calculate the Sales price variance and the Sales volume variance
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