Alpha manufacturing company produces a single product, which is known as sigma. The product requires a single operation and the standard cost for this operation is presented in the following standard cost card:

Alpha ltd plan to produce 10 000 units of sigma in the month of April, and the budgeted costs based on the information contained in the standard cost card are as follows:
Budget based on the above standard costs and an output of 10 000 units

Annual budgeted fixed overheads are £1 440 000 and are assumed to be incurred evenly throughout the year. The company uses a variable costing system for internal profit measurement purposes.
The actual results for April are:

Manufacturing overheads are charged to production on the basis of direct labour hours . Actual production and sales for the period were 9000 units.

Transcribed Image Text:

Standard cost card for product sigma Direct materials: 2 kg of A at 1 per kg 1 kg of B at 3 per kg Direct labour (3 hours at 3 per hour) Variable overhead (3 hours at 2 per direct labour hour) Total standard variable cost Standard contribution margin Standard selling price () 2.00 3.00 9.00 6.00 20.00 20.00 40.00