the following information is available for the month of july 1 budget actual direct materials 200,000 201,285 direct labour 313,625. 337,500 variable manufacturing overhead 141,400. 143,000 fixed manufacturing overhead 64,400. 69,500 variable sales overhead 75,000. 71,000 admistation cost 150,000. 148650 2. standard costs were: direct labour 48,250 hours at $6.50 per hour direct materials 20,000 kgs at $10 a kg 3. actual manufacturing costs were: direct labour 50,000 hours at $6.75 per hour direct materials 18,900 kgs at $10.65 a kg 4. budgeted sales were 20,000 unitsa at $50 a unit actual sales were 15,000 units at $52 a unit 5200 units at $56 a unit 5. there was no work in progress or stock of finished goods. Required a) an accounting statement showing the budgted and actual gross and net profits or losses for july b) the following variances for july 1) direct materials cost variance, direct materials price varaince and direct materials usage varaiance. 2) direct labour cosr variance, direct labour rate variance and direct efficiency varaiance c) what use can the management of borrico ltd make of the variances calculated in (b) above?
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.
the following information is available for the month of july
1 budget actual
direct materials 200,000 201,285
direct labour 313,625. 337,500
variable manufacturing
fixed manufacturing overhead 64,400. 69,500
variable sales overhead 75,000. 71,000
admistation cost 150,000. 148650
2.
direct labour 48,250 hours at $6.50 per hour
direct materials 20,000 kgs at $10 a kg
3. actual
direct labour 50,000 hours at $6.75 per hour
direct materials 18,900 kgs at $10.65 a kg
4. budgeted sales were 20,000 unitsa at $50 a unit
actual sales were
15,000 units at $52 a unit
5200 units at $56 a unit
5. there was no work in progress or stock of finished goods.
Required
a) an accounting statement showing the budgted and actual gross and net
b) the following variances for july
1) direct materials cost variance, direct materials price varaince and direct materials usage varaiance.
2) direct labour cosr variance, direct labour rate variance and direct efficiency varaiance
c) what use can the management of borrico ltd make of the variances calculated in (b) above?
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