Bronte Ltd manufactures a single product, a laminated kitchen unit with a standard cost of 80 made up as follows:

The standard selling price of the kitchen unit is £100. The monthly budget projects production and sales of 1000 units. Actual figures for the month of April are as follows:
Sales 1200 units at £102 Production 1400 units Direct materials 22000 sq. metres at £4 per sq. metre Direct wages 6800 hours at £5 Variable overheads £11000 Fixed overheads £6000 You are required to prepare:

(a) a trading account reconciling actual and budgeted profit and showing all the appropriate variances; (13 marks)

(b) ledger accounts in respect of the above transactions.Appendix

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Direct materials (15 sq. metres at 3 sq. metre) () per 45 20 10 Direct labour (5 hours at 4 per hour) Variable overheads (5 hours at 2 per hour) Fixed overheads (5 hours at 1 per hour) 5 80