Underpar Ltd has prepared a budget based on standard costs. It is shown below together with the actual results.

Required 

(a) Prepare a flexed budget for 6300 units. 

(b) Calculate: 

(i) Total cost variance 

(ii) Expenditure variance 

(iii) Direct material variance 

(iv) Direct labour variance. 

(c) Reconcile the actual cost incurred with the budgeted costs, using the variances calculated in (b).

Transcribed Image Text:

No. of units Direct material Direct labour Variable overhead Fixed overhead Total costs Budget 7000 $ 23 800 47 250 3 500 62 000 136 550 Actual 6300 $ 20 890 44 065 3 250 62 000 130 205