A company manufactures washing machines. The budgeted output is 1,500 washing machines each accounting period. The standard cost of each washing machine includes 0.25 hours of direct labour at £16 an hour.  The following information is available for a particular accounting period:  • 1,350 washing machines were made  • 340 hours of labour were worked at the cost of £5,100  What are the labour rate and labour efficiency variances?   A Labour rate £340 favourable; labour efficiency £40 favourable.  B Labour rate £1,360 favourable; labour efficiency £160 favourable.  C Labour rate £1,360 favourable; labour efficiency £160 adverse.  D Labour rate £340 favourable; labour efficiency £40 adverse.

Covine Ltd is a company that makes three products and the variable costs are as follows;                                                              A                    B                    C                                                             £                      £                      £          Direct materials                                12                   13                   15 Direct labour (£12 per hour)          24                   36                   36 Variable overhead                           1                      2                      2                                                             37                   51                   53   The sale price of A is £42, B is £57 and C is £56. During the month of June the availability of Direct Labour is limited to 12,000 hours due to staff taking holidays. Sales demand is expected to be 3000 units of A, 3000 units of B and 2000 of C. Monthly fixed costs are £20,000 and opening stocks are zero.…

Caltex Products plc manufactures electric mini-lawnmowers. Its sales and costs’ budget for November 20X2 is as follows:   Sales: 3 000 units × £72/unit   Costs:Direct materials (metal):  3 000 units × (1kg per unit × £14/kg) Direct materials (plastic): 3 000 units × (0.5kg per unit × £7/kg) Direct labour: 3 000 units × (0.75 hours per unit × £8/hr)  Production overhead:  £86 500 Other overheads: £31 000   The company does not absorb production overheads using an overhead absorption rate.  It may be assumed that all of its overheads are fixed in nature.The company’s actual results for the same month (November) are as follows: Sales: 2 950 units × £73/unit  Costs:Direct materials (metal): 2 950 units × (0.9kg per unit × £13.80/kg)   Direct materials (plastic): 2 950 units × (£0.5kg per unit × £7.20/unit) Direct labour: 2 950 units × (0.7 hrs per unit × £8.20/hr) Production overhead: £84 250 Other overheads: £32 250Net profit: £34 658     Required: a. i)  Produce a budget statement for…

A small company produces two products, x and y. Product x requires 1 hour of labour and 6 tons of raw materials, whereas each unit of product y requires2 hours of labour and 5 tons of raw material. The number of hours available each week is 40 and the available raw materials each week is 150 tons. If the contribution to profit is £2 per unit of product x and £3 per unit of y, determine the weekly production mix that will maximize profits.