Question

In: Accounting

TG manufactures Product Z. Its standard selling price is $55. The production and sales budget for...

TG manufactures Product Z. Its standard selling price is $55. The production and sales budget for the quarter ended 31 March 20X3 was 7,500 units. The standard specification per unit of Product Z comprises: Direct labour 4 standard hours at $6/hour Direct material 1.2 kg at $10/kg Standard variable overhead 4 standard hours at $1/hour Budgeted fixed overhead $75,000 At the end of the quarter the management accounts showed the following:

Production and sales of product Z in units: 7700

Actual sales revenue: $424270

Actual direct labour (31,750): $192577

Actual direct material (8855 kg) :    $89436

Actual fixed overhead: $72400

(a) Prepare a statement reconciling budgeted and actual profit in the quarter, using absorption costing.

(b) Prepare a statement reconciling budgeted and actual profit in the quarter, using marginal costing.

Solutions

Expert Solution

Below are the working for calculation of variances. Minus denote Adverse (A) and positive figure denote Favorable (F)

material st. price act. Price act. Qty std. qty
92400 89436 8855 9240
Variance 2964 F
Labour cost variance st. hours act. Hours actual standard
30800 31750 192577 184800
Variance -7777
Variable overhead variance
st. hours act. Hours actual standard
30800 31750
variance -950
Fixed overhead variance
Budeged (-) Actual
75000 72400
Variance 2600
Sale variance
Budeged (-) Actual
423500 424270
770
Statement under absorption costing
budgeted profit 32723
sales volume variance
sales price variance 770 f
----
cost variances $f $a
materials price 2964
material usage
labour rate 7777
labour idle
labour efficiency
variable overheads expenditure 950
variable overheads efficiency
fixed overheads expenditure 2600
fixed overheads efficiency
fixed overheads capacity
---- ----
5564 8727 33493 30330
Actul Profit 38107
Statement under Marginal costing
budgeted profit 32723
sales volume variance
sales price variance 770
----
cost variances $f $a
materials price 2964
material usage
labour rate 7777
labour idle
labour efficiency
variable overheads expenditure 950
variable overheads efficiency
2964 8727 33493 27730
Actul Profit 38107

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Jacobs Incorporated manufactures a product with a selling price of $55 per unit. Units and monthly...
Jacobs Incorporated manufactures a product with a selling price of $55 per unit. Units and monthly cost data follow: Variable: • Selling and administrative: $4.60 per unit • Direct materials: $15.25 per unit manufactured • Direct labor: $12.50 per unit manufactured • Variable manufacturing overhead: $7.00 per unit manufactured Fixed: • Selling and administrative: $60,000 per month • Manufacturing (including depreciation of $10,000): 45,000 per month Jacobs Incorporated pays all bills in the month incurred. All sales are on account...
The estimated project cost, sales, rent, selling price and production and selling costs of the product...
The estimated project cost, sales, rent, selling price and production and selling costs of the product of a new project are given below. Compute the NPV and payback period of the project. Assume the costs are incurred at the beginning of the year, zero depreciation, no taxes, and discount rate as 10%, Show all calculations. Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Project cost (Rs. Million) 40 70 Rent for land, buildings and machinery (Rs....
Vernon Inc. manufactures and sells one product. Sales and production information is contained below. • Selling...
Vernon Inc. manufactures and sells one product. Sales and production information is contained below. • Selling price per unit $50 • Variable manufacturing costs per unit produced (DM, DL, and variable MOH) $24 • Variable operating expenses per unit sold $5 • Fixed manufacturing overhead (MOH) in total for the year $135,000 • Fixed operating expenses in total for the year $55,000 • Units produced during the year 15,000 • Units sold during the year 13,000 (a) Prepare the income...
Lilly Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales budget...
Lilly Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 3,200 units are planned to be sold in December. The variable selling and administrative expense is $3.10 per unit. The budgeted fixed selling and administrative expense is $60,800 per month, which includes depreciation of $6,720 per month. The remainder of the fixed selling and administrative expense represents current cash flows.Calculate the budgeted cash disbursements for selling and administrative expenses for December. Give your...
Developing a Master Budget for a Manufacturing Organization Jacobs Incorporated manufactures a product with a selling...
Developing a Master Budget for a Manufacturing Organization Jacobs Incorporated manufactures a product with a selling price of $50 per unit. Units and monthly cost data follow: Variable: Selling and administrative $5 per unit sold Direct materials 10 per unit manufactured Direct labor 10 per unit manufactured Variable manufacturing overhead 5 per unit manufactured Fixed: Selling and administrative $20,000 per month Manufacturing (including depreciation of $10,000) 30,000 per month Jacobs pays all bills in the month incurred. All sales are...
Developing a Master Budget for a Manufacturing Organization Jacobs Incorporated manufactures a product with a selling...
Developing a Master Budget for a Manufacturing Organization Jacobs Incorporated manufactures a product with a selling price of $50 per unit. Units and monthly cost data follow: Variable: Selling and administrative $5 per unit sold Direct materials 10 per unit manufactured Direct labor 10 per unit manufactured Variable manufacturing overhead 5 per unit manufactured Fixed: Selling and administrative $20,000 per month Manufacturing (including depreciation of $10,000) 30,000 per month Jacobs pays all bills in the month incurred. All sales are...
Developing a Master Budget for a Manufacturing Organization Jacobs Incorporated manufactures a product with a selling...
Developing a Master Budget for a Manufacturing Organization Jacobs Incorporated manufactures a product with a selling price of $50 per unit. Units and monthly cost data follow: Variable: Selling and administrative $ 4 per unit sold Direct materials $ 10 per unit manufactured Direct labor $ 10 per unit manufactured Variable manufacturing overhead $ 5 per unit manufactured Fixed: Selling and administrative $15,000 per month Manufacturing (including depreciation of $ 10,000) 30,000 per month Jacobs pays all bills in the...
LearnCo Sales Budget For the Year Ending December 31, 20Y2 Product Unit Sales Volume Unit Selling...
LearnCo Sales Budget For the Year Ending December 31, 20Y2 Product Unit Sales Volume Unit Selling Price Total Sales Basic Abacus 36000 $7 $252,000 Deluxe Abacus 36000 13 468,000 Totals 72,000 - $720,000 LearnCo Production Budget For the Year Ending December 31, 20Y2 Units Basic Units Deluxe Expected units to be sold (from Sales Budget) 36000 36000 Desired ending inventory, December 31, 20Y2 1,000 3,000 Total units available 37000 39000 Estimated beginning inventory, January 1, 20Y2 (1,050) (2,100) Total units...
The details of estimated project cost, sales and selling price of the product, depreciation and salvage...
The details of estimated project cost, sales and selling price of the product, depreciation and salvage value of a new project are given in the table below. All revenues and costs occur at the end of the period. The income tax rate is 20%. a) Find NPV of the project if the discount rate is 10%. b) The promoters has invested Rs 55 million in Year 1 and Rs 35 million in Year 2. Prepare the cash flow statement (Sources...
Factory X who has a product with a selling price of $ 500 and annual sales...
Factory X who has a product with a selling price of $ 500 and annual sales of 6,000 units. Fixed costs are $ 40,000 and variable costs are $ 150,000 (both annually). Owners of Factory X could invest in an alternative business, Factory C in which they will have a profit of $ 150,000. What is the accounting profit of Factory X business? What is the economic profit of Factory X business?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT