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: £32 250 Net profit: £34 658 Required: a. i) Produce a budget statement for Caltex for November  ii) Produce a profit statement for Caltex for November b. Produce a flexed budget statement for Caltex for November  c. Calculate: i) Sales price variance ii) Sales profit – volume variance iii) Materials price variance (both materials) iv) Labour rate variance v) Labour efficiency variance vi) Overhead variances (both)

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: £32 250
Net profit: £34 658


Required:
a.
i) Produce a budget statement for Caltex for November 
ii) Produce a profit statement for Caltex for November

b.
Produce a flexed budget statement for Caltex for November 

c.
Calculate:
i) Sales price variance
ii) Sales profit – volume variance
iii) Materials price variance (both materials)
iv) Labour rate variance
v) Labour efficiency variance
vi) Overhead variances (both)