6. A company budgets to sell 600 units of product F at a sales price of N30. The standard füll cost of production is N20 for variable costs and N8 for fixed cost, i.e. N28 in total, so that the standard profit is 2 per unit of product F. If actual sales are 620 units for N20,460. You are required to determine the: (a) Sales price variance, and (b) Sales volume variance. 7. Kanako Ltd, manufactures one product, and the entire product is sold as soon as it is produced. There are no opening or elosing inventories and work-in- progress is negligible. The company operates a standard costing system and analysis of variance is made very month. The standard cost card for the product "ZOOM" is as follows: 0.5 kilos @ N4.00 per kilo 2hours @ N2.00 per hour 2 hours @ NO.30 per hour 2 hours @ N3.70 per hour Direct materials N2.00 Direct wages Variable overheads N4.00 N0.60 N7.40 N14.00 Fixed overheads Standard cost Standard profit Standard selling price N6.00 N20.00 Selling and administrative expenses are not included in the standard cost, and are deducted from profit as a period charge. Budgeted output for the month of January, 2020 was 5,100 units. Actual results for January, 2020 were as follows: Production of 4,850 units was sold for N95,600. Materials consumed in production amounted to 2,300 kilo at a total cost of N9,800. Labour hours paid for amounted to 8,500 hours at a cost of N16,800. Actual operating hours amounted to 8,000 hours. Variable overheads amounted to N2,600. Fixed overheads amounted to N42,300. Selling and administrative expenses amounted to N 18,000. You are required to: (a) Calculate all variances. (b) Prepare an operating statement for the month ended 31 January, 2020.
6. A company budgets to sell 600 units of product F at a sales price of N30. The standard füll cost of production is N20 for variable costs and N8 for fixed cost, i.e. N28 in total, so that the standard profit is 2 per unit of product F. If actual sales are 620 units for N20,460. You are required to determine the: (a) Sales price variance, and (b) Sales volume variance. 7. Kanako Ltd, manufactures one product, and the entire product is sold as soon as it is produced. There are no opening or elosing inventories and work-in- progress is negligible. The company operates a standard costing system and analysis of variance is made very month. The standard cost card for the product "ZOOM" is as follows: 0.5 kilos @ N4.00 per kilo 2hours @ N2.00 per hour 2 hours @ NO.30 per hour 2 hours @ N3.70 per hour Direct materials N2.00 Direct wages Variable overheads N4.00 N0.60 N7.40 N14.00 Fixed overheads Standard cost Standard profit Standard selling price N6.00 N20.00 Selling and administrative expenses are not included in the standard cost, and are deducted from profit as a period charge. Budgeted output for the month of January, 2020 was 5,100 units. Actual results for January, 2020 were as follows: Production of 4,850 units was sold for N95,600. Materials consumed in production amounted to 2,300 kilo at a total cost of N9,800. Labour hours paid for amounted to 8,500 hours at a cost of N16,800. Actual operating hours amounted to 8,000 hours. Variable overheads amounted to N2,600. Fixed overheads amounted to N42,300. Selling and administrative expenses amounted to N 18,000. You are required to: (a) Calculate all variances. (b) Prepare an operating statement for the month ended 31 January, 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:6. A company budgets to sell 600 units of product F at a sales price of N30. The standard
füll cost of production is N20 for variable costs and N8 for fixed cost, i.e. N28 in total, so
that the standard profit is 2 per unit of product F. If actual sales are 620 units for
N20,460. You are required to determine the:
(a) Sales price variance, and
(b) Sales volume variance.
7. Kanako Ltd, manufactures one product, and the entire product is sold as soon as it is
produced. There are no opening or elosing inventories and work-in- progress is
negligible. The company operates a standard costing system and analysis of variance is
made very month. The standard cost card for the product "ZOOM" is as follows:
0.5 kilos @ N4.00 per kilo
2hours @ N2.00 per hour
2 hours @ NO.30 per hour
2 hours @ N3.70 per hour
Direct materials
N2.00
Direct wages
Variable overheads
N4.00
N0.60
N7.40
N14.00
Fixed overheads
Standard cost
Standard profit
Standard selling price
N6.00
N20.00
Selling and administrative expenses are not included in the standard cost, and are
deducted from profit as a period charge.
Budgeted output for the month of January, 2020 was 5,100 units.
Actual results for January, 2020 were as follows:
Production of 4,850 units was sold for N95,600.
Materials consumed in production amounted to 2,300 kilo at a total cost of N9,800.
Labour hours paid for amounted to 8,500 hours at a cost of N16,800.
Actual operating hours amounted to 8,000 hours.
Variable overheads amounted to N2,600.
Fixed overheads amounted to N42,300.
Selling and administrative expenses amounted to N 18,000.
You are required to:
(a) Calculate all variances.
(b) Prepare an operating statement for the month ended 31 January, 2020.
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