Required:Calculate all variances and prepare an operating statement for the month endedJune 2015 by using the following table format. Sales variances£Favourable (F)/Adverse (A)Sales price variance: Sales volume variance: Total sales variance Direct material variances£Favourable (F)/Adverse (A)Material price variance: Material usage variance: Total direct material variance Direct labour variances£Favourable (F)/ Adverse (A)Labour rate variance: Labour efficiency variance: Total direct labour variance Variable overhead variances£Favourable (F)/ Adverse (A)Variable overhead rate variance: Variable overhead efficiency variance: Total Variable overhead variance Variable overhead variances£Favourable (F)/ Adverse (A)Variable overhead rate variance: Variable overhead efficiency variance: Total Variable overhead variance Direct labour variances£Favourable (F)/ Adverse (A)Labour rate variance: Labour efficiency variance: Total direct labour variance Direct material variances£Favourable (F)/Adverse (A)Material price variance: Material usage variance: Total direct material variance Question 3Jones plc manufactures one product, and the entire product is sold as soon as it isproduced. There are no opening or closing inventories and work in progress isnegligible. The company operates a standard costing system and analysis ofvariances is made every month. The standard cost card for a product is as follows.0.5 kilos at£4 per kilo2 hours at £8.00 per hourVariable Overheads 2 hours at£0.30 per hourDirect MaterialsDirect WagesStandard Variable CostStandard ContributionStandard Selling PriceBudgeted output for the month of June 2015 was 5,100 units.Actual results for June 2015 were as follows:£2.0016.00.6018.6013.4032.00Production 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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Answered: Required: Calculate all variances and…

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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Required:

Calculate all variances and prepare an operating statement for the month ended
June 2015 by using the following table format.

*Sales variances*	£	Favourable (F)/Adverse (A)
Sales price variance:



Sales volume variance:



Total sales variance

*Direct material variances*	£	Favourable (F)/Adverse (A)
Material price variance:



Material usage variance:



Total direct material variance

*Direct labour variances*	£	Favourable (F)/ Adverse (A)
Labour rate variance:



Labour efficiency variance:



Total direct labour variance

*Variable overhead variances*	£	Favourable (F)/ Adverse (A)
Variable overhead rate variance:



Variable overhead efficiency variance:



Total Variable overhead variance

*Variable overhead variances*	£	Favourable (F)/ Adverse (A)
Variable overhead rate variance:



Variable overhead efficiency variance:



Total Variable overhead variance

*Direct labour variances*	£	Favourable (F)/ Adverse (A)
Labour rate variance:



Labour efficiency variance:



Total direct labour variance

*Direct material variances*	£	Favourable (F)/Adverse (A)
Material price variance:



Material usage variance:



Total direct material variance

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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