The following information relates to questions Moon Phase Ltd are a company manufacturing sails for Scorpion sail boats. The company expects production and sales in July 2021 to be 2,000 sails. The budget for these 2,000 sails is detailed below with materials and labour being variable costs and overheads being a mixed cost. Materials Labour Overhead 150,000 96,000 65,000 Each sail is expected to use 7.5 square metres of fabric and 4 hours of labour. The overhead for August, which is based on production and sales of 1,500 units, is £55,000. In July 3,000 units are produced. 22,000 square metres of material are used at a cost of £231,000 and 11,550 hours of labour are used at a cost of £12.50 per hour 1. The flexed budget for 3,000 sails is: (a) Materials £150,000, Labour £96,000 and Overhead £65,000 (b) Materials £225,000, Labour £144,000 and Overheads £85,000 (c) Materials £225,000 Labour £144,000 and Overheads £97,500 (d) Materials £225,000 Labour £144,000 and Overheads £110,000 The material price variance for the month of July is: (a) £11,000 A (b) £11,000 F (c) £6,000 F (d) £6,000 A The material usage variance for the month of July is: (a) £5,000 A (b) (c) (d) £6,000 A £5,000 F 6,000 F

The following information relates to questions Moon Phase Ltd are a company manufacturing sails for Scorpion sail boats. The company expects production and sales in July 2021 to be 2,000 sails. The budget for these 2,000 sails is detailed below with materials and labour being variable costs and overheads being a mixed cost. Materials Labour Overhead 150,000 96,000 65,000 Each sail is expected to use 7.5 square metres of fabric and 4 hours of labour. The overhead for August, which is based on production and sales of 1,500 units, is £55,000. In July 3,000 units are produced. 22,000 square metres of material are used at a cost of £231,000 and 11,550 hours of labour are used at a cost of £12.50 per hour 1. The flexed budget for 3,000 sails is: (a) Materials £150,000, Labour £96,000 and Overhead £65,000 (b) Materials £225,000, Labour £144,000 and Overheads £85,000 (c) Materials £225,000 Labour £144,000 and Overheads £97,500 (d) Materials £225,000 Labour £144,000 and Overheads £110,000 The material price variance for the month of July is: (a) £11,000 A (b) £11,000 F (c) £6,000 F (d) £6,000 A The material usage variance for the month of July is: (a) £5,000 A (b) (c) (d) £6,000 A £5,000 F 6,000 F

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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