FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
Bartleby Related Questions Icon

Related questions

bartleby

Concept explainers

Question
Question 3
Owen plc manufactures one product, and the entire product is sold as soon as it is
produced. The company operates a standard costing system and analysis of
variances is made every month. The standard cost card for a product is as follows.
Materials (4 Kg at £4 per Kg)
Labour (4 Hours at £5 per hr)
Variable overheads (5 hrs at £2 per hr)
Fixed overheads (6 hrs at £3 per hr)
Budgeted selling price is £80 per unit
Budgeted production
Budgeted sales
There is no opening inventory
The actual results are as follows:
Sales: 8,400 units for £613,200
Production: 9,900 units
Actual costs:
Materials (35,464 kg): £163,455
Labour: £ 234,515
Variable overheads: £97,348
Fixed overheads: £ 144,074
£ per Unit
16
20
10
18
£64
8.900 units
8,200 units
Required:
a) Prepare a flexed budget and calculate the total variances
b) Using the data, analyse each of the cost variances: Materials; Labour;
Variable Overheads and; Fixed Overheads
c) Using data, calculate the Sales price variance and the Sales volume variance
expand button
Transcribed Image Text:Question 3 Owen plc manufactures one product, and the entire product is sold as soon as it is produced. The company operates a standard costing system and analysis of variances is made every month. The standard cost card for a product is as follows. Materials (4 Kg at £4 per Kg) Labour (4 Hours at £5 per hr) Variable overheads (5 hrs at £2 per hr) Fixed overheads (6 hrs at £3 per hr) Budgeted selling price is £80 per unit Budgeted production Budgeted sales There is no opening inventory The actual results are as follows: Sales: 8,400 units for £613,200 Production: 9,900 units Actual costs: Materials (35,464 kg): £163,455 Labour: £ 234,515 Variable overheads: £97,348 Fixed overheads: £ 144,074 £ per Unit 16 20 10 18 £64 8.900 units 8,200 units Required: a) Prepare a flexed budget and calculate the total variances b) Using the data, analyse each of the cost variances: Materials; Labour; Variable Overheads and; Fixed Overheads c) Using data, calculate the Sales price variance and the Sales volume variance
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education