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

Additional information:

• The actual sales revenue was £12 000.
• The direct materials purchased were 1000 kg.
Required:

(a) Calculate (i) 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.

Transcribed Image Text:

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