Twin Towers Trading Ltd manufactures one product, “The Personal Valet” sets. The new Personal Valet can pick up lint, dust, and pet hair with ease. The promotional statement states that “Unlike the old-fashioned rollers which use expensive, discardable sticky tape, the Personal Valet set uses a miracle sticky gel that is 100% reusable and will last for years. These lint rollers are great for furniture and upholstery and can be washed easily in warm soapy water.” The standard cost for a Personal Valet set is as follows: £ Selling price 55 Direct materials (5 kgs) 10 Direct labour (4 hours) 20 Variable production overhead 5 Fixed production overhead 15 Budgeted output for the month of November 2018 was 40,000 Personal Valet sets. Both standard variable and fixed production overheads were calculated based on the budgeted labour hours. Actual results for November 2018 were as follows: £ Sales (50,000 Personal Valet sets) 2,250,000 Direct materials (240,000 kgs) 528,000 Direct labour (250,000 hours) 1,375,000 Variable Production overhead 245,000 Fixed production overhead 650,000 Required: Calculate as many variances as the data permits to be incorporated into the operating statement for the month of November. Prepare the operating statement for the month of 2018.
Twin Towers Trading Ltd manufactures one product, “The Personal Valet” sets. The new Personal Valet can pick up lint, dust, and pet hair with ease. The promotional statement states that “Unlike the old-fashioned rollers which use expensive, discardable sticky tape, the Personal Valet set uses a miracle sticky gel that is 100% reusable and will last for years. These lint rollers are great for furniture and upholstery and can be washed easily in warm soapy water.” The
|
£ |
|
|
Selling price |
55 |
|
Direct materials (5 kgs) |
10 |
|
Direct labour (4 hours) |
20 |
|
Variable production overhead |
5 |
|
Fixed production overhead |
15 |
Budgeted output for the month of November 2018 was 40,000 Personal Valet sets. Both standard variable and fixed production
Actual results for November 2018 were as follows:
|
£ |
|
|
Sales (50,000 Personal Valet sets) |
2,250,000 |
|
Direct materials (240,000 kgs) |
528,000 |
|
Direct labour (250,000 hours) |
1,375,000 |
|
Variable Production overhead |
245,000 |
|
Fixed production overhead |
650,000 |
Required:
- Calculate as many variances as the data permits to be incorporated into the operating statement for the month of November.
- Prepare the operating statement for the month of 2018.
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