A company manufactures and sells one product. At the end of 2017, the managers were disappointed that the profit was lower than expected and asked for an explanation of the results. -

Calculate the following variances:_

1. Material price and usage
2. Labour rate and efficiency
3. Overhead spending and volume
4. Sales volume and price

BUDGET ACTUAL Sales 1 200 units 36 000 1 800 units 50 000 600 kg 2 400 hours 6 000 12 000 1 000 kg 4 000 hours 6 000 Material (variable cost) Labour (variable cost) Fixed overheads Total costs Profit/ (Loss) 9 000 28 000 8 000 45 000 5 000 24 000 12 000