The following data for the Golden Garden Company (GGC) pertains to the production of 2,500 garden spades during April. The spade consists of a wooden handle and a metal forged tool that comes in contact with the ground. Direct Materials (all materials purchased were used): Standard cost: $1.00 per handle and $3.50 per metal tool Total actual cost: $11,350. Materials flexible-budget efficiency variance was $650 unfavourable. Direct Manufacturing Labour: Standard cost is 5 garden spades per hour at $20.00 per hour. Actual cost per hour was $21.00 Labour efficiency variance was $400 favourable. Required What is the standard direct material amount per garden spade? What is the standard cost allowed for all units produced? What is the total direct materials flexible-budget variance?
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 2.2
The following data for the Golden Garden Company (GGC) pertains to the production of 2,500 garden spades during April. The spade consists of a wooden handle and a metal forged tool that comes in contact with the ground.
Direct Materials (all materials purchased were used):
Standard cost : $1.00 per handle and $3.50 per metal tool
- Total actual cost: $11,350.
- Materials flexible-budget efficiency variance was $650 unfavourable.
Direct Manufacturing Labour:
- Standard cost is 5 garden spades per hour at $20.00 per hour.
- Actual cost per hour was $21.00
- Labour efficiency variance was $400 favourable.
Required
- What is the standard direct material amount per garden spade?
- What is the standard cost allowed for all units produced?
- What is the total direct materials flexible-
budget variance ? - What is the direct material flexible-budget rate variance?
- What is the total actual cost of direct manufacturing labour?
- What is the labour rate variance for direct manufacturing labour?
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