Actual Results for June
Revenue Actual number of tests performed: 22 tests which were priced at 9,900 each. Costs incurred: Materials Owing to the efficiency of operating staff, Autotechs wasted less material and only used 0.09 litres per procedure. This meant they only used 1.98 litres in total during June.There was an unexpected rise in material prices, so the procurement team actually spent 21,780 on materials (11,000 per litre). Labour fees The team worked a total of 47 hours and were paid a total of 75,400. Overheads Actual variable overheads cost in total 48,000 (1,021.28 per hour). Actual fixed overheads were 46,000
QUESTIONS :
(a) Prepare a flexed budget showing the profit based on the actual level of activity (22 tests). (8 marks)
b) Calculate the actual profit made in June. (3 marks)
(c) Prepare a statement that reconciles the original budgeted profit for June with the actual profit for June. Your statement should show the variances in as much detail as possible. (21 marks)
(d) Discuss who should be rewarded/held responsible for any four variances that you calculated for the reconciliation in c) above. (8 marks) Total 40 mark
QUESTIONS:
a) Prepare a flexed budget showing the profit based on the actual level of activity (22 tests). (8 marks)
b) Calculate the actual profit made in June. (3 marks)
(c)Prepare a statement that reconciles the original budgeted profit for June with the actual profit for June. Your statement should show the variances in as much detail as possible. (21 marks)
(d) Discusswho should berewarded/held responsibleforany fourvariances that
you calculated for the reconciliation in c) above
Los Angeles, California winter we x PC: BA2520(ppr).pdf X + ers/DELL/Downloads/BA2520(ppr).pdf + E D A D V Question 3 (Standard Costing) Autotechs LLP is an engineering performance enhancement specialist in the provision of a particular performance testing service for high-performance road cars. Autotechs seeks to provide a premium service aimed at discerning corporate users that require optimum performance from their executive cars. In order to do this, it hires teams of specialist staff on a sub-contract basis and pays for the hours that they have worked The material they use in the process of the tests is associated with Formula 1 (racing) standards and thus it is very expensive. Variable overhead costs are attributed to the tests based on direct labour cost. Budget for June Budgeted number of tests to be performed: 20 tests Per test For 20 tests $ E 200,000 10,000 Sales Revenue Less: Materials 0.1 litres @ 10,000 per litre 1.000 20.000 Labour fee 2 hours @ 1,500 per hour 3.000 60,000 Variable overheads 2 hours @975 per hour Contribution Less: Total fixed overheads for June Budgeted profit for June 1,950 4,050 39.000 B1.000 48.000 $33,000 QUESTION CONTINUES ON NEXT PAGE UL22/0379 Page 6 of 9 O 3 DOLL Question 3 (Standard Costing) Autotechs LLP is an engineering performance enhancement specialist in the provision of a particular performance testing service for high-performance road cars. Autotechs seeks to provide a premium service aimed at discerning corporate users that require optimum performance from their executive cars. In order to do this, it hires teams of specialist staff on a sub-contract basis and pays for the hours that they have worked. The material they use in the process of the tests is associated with Formula 1 (racing) standards and thus it is very expensive. Variable overhead costs are attributed to the tests based on direct labour cost. Budget for June Budgeted number of tests to be performed: 20 tests Per test For 20 tests Sales Revenue 10.000 200,000 Less: 1,000 20,000 Materials 0.1 litres @ 10,000 per litre Labour fee: 2 hours @ 1,500 per hour 3,000 60,000 1,950 39,000 Variable overheads 2 hours @ 975 per hour Contribution Less: Total fixed overheads for June Budgeted profit for June 4,056 81,000 48.000 33.000 QUESTION CONTINUES ON NEXT PAGE Actual Results for June Revenue Actual number of tests performed: 22 tests which were priced at 9,900 each. Costs incurred: Materials Owing to the efficiency of operating staff, Autotechs wasted less material and only used 0.09 litres per procedure. This meant they only used 1.98 litres in total during June. There was an unexpected rise in material prices, so the procurement team actually spent 21,780 on materials (11,000 per litre). Labour fees The team worked a total of 47 hours and were paid a total of 75,400. a Overheads Actual variable overheads cost in total 48,000 (1,021.28 per hour) Actual fixed overheads were 46,000. Required: (a) Prepare a flexed budget showing the profit based on the actual level of activity (22 tests) (8 marks) b) Calculate the actual profit made in June (3 marks) (c) Prepare a statement that reconciles the original budgeted profit for June with the actual profit for June. Your statement should show the variances in as much detail as possible. (21 marks) (d) Discuss who should be rewarded/held responsible for any four variances that you calculated for the reconciliation in c) above. (8 marks) Total 40 marks
