1 BS Umited manufactures one standard product and operates a system of variance accounting using a fixed budget. As assistant management accountant, you are responsible for preparing the monthly operating statements. Data from the budget, the standard product cost and actual data for the month ended 31 October 1982 are given below.

Using the data given, you are required to prepare the operating statement for the month ended 31 October 1982 to show the budgeted profit; the variances for direct materials, direct wages, overhead and sales, each analysed into causes; and actual profit.

Budgeted and standard cost data:

Budgeted sales and production for the month: 10000 units Standard cost for each unit of product:

Direct material, X: 10 kg at £1 per kg Y: 5kg at £5 per kg Direct wages: 5 hours at £3 per hour Fixed production overhead is absorbed at 200% of direct wages Budgeted sales price has been calculated to give a profit of 20% of sales price.

Actual data for month ended 31 October 1982:

Production: 9500 units sold at a price of 10% higher than that budgeted Direct materials consumed:

X 96 000 kg at £1 .20 per kg Y: 48000kg at £4.70 per kg Direct wages incurred 46 000 hours at £3.20 per hour Fixed production overhead incurred £290000