17.18 Intermediate: Calculation of actual quantities working backwards from variances. The following profit reconciliation statement summarizes the performance of one of SEWs products for March. () Budgeted profit Sales volume variance Standard profit on actual sales Selling price variance 4250 850A 3400 4000A (600) Adverse () Favourable Favourable () Cost variances: 1000 Direct material price Direct material usage Direct labour rate Direct labour efficiency Variable overhead expenditure Variable overhead efficiency Fixed overhead efficiency Fixed overhead volume Actual profit 150 200 150 600 75 2500 150 3650 1175 2475F 1875 The budget for the same period contained the following data: 1500 units 20000 1500 units 750kg 750kg Sales volume Sales revenue Production volume Direct materials purchased Direct materials used Direct material cost Direct labour hours Direct labour cost Variable overhead cost Fixed overhead cost 4500 1125 4500 2250 4500 Additional information: stocks of raw materials and finished goods are valued at standard cost; during the month the actual number of units produced was 1550; the actual sales revenue was 12000; the direct materials purchased were 1000kg. Required: (a) Calculate (0) 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. (6 marks) CIMA Operational Cost Accounting Stage 2