Calculation of actual quantities working backwards from variances The following profit reconciliation statement summarizes the performance of one of SEW’s products for March.

The budget for the same period contained the following data:

Required:

(a) Calculate (1) the actual sales volume;
(ii) the actual quantity of materials used;
(iii) the actual direct material cost;
(iv) the actual direct labour hours;
(v) the actual direct labour cost;
(vi) the actual variable overhead cost;
(vii) the actual fixed overhead cost.
(19 marks)

(b) Explain the possible causes of the direct materials usage variance, direct labour rate variance and sales volume variance.

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Budgeted profit () 4250 Sales volume variance Standard profit on actual sales Selling price variance 850A 3400 4000A (600)