b) During the latter part of 2016 Bezo had undertaken a substantial review of its operations. This review had resulted in the company changing its supplier of the raw material. The new material sourced was more expensive at ?6.20 per kg the product designers believed that this new material was more cost effective and the quantity required for the product was reduced from 6 kg per unit to 5.5 kg per unit.The company has also negotiated a productivity agreement with the trade union representing production workers at the company. This new agreement would see production wages rise by ?0.70 per hour. Productivity would increase resulting in the standard hours required per unit to fall to 80% of the previous requirement. This new information has not been considered to date. As the junior management accountant you have been requested to extract detailed Planning and Operational variances for the direct labour and the Direct Materials for the first quarter of 2017a) Using variance analysis, reconcile the budgeted and actual contribution for the first quarter of 2017 using the data provided.

ngd is a manufacturing company which operates within the medical devices industry. The company has operated a stande costing system for a number of years. The company prepared the budget for the rst quarter of 2017. The budgeted level of activity is for production and sales volumes of 12,000 units. Details of the Selling price and costs are given in the table below. Budgeted Selling Price per unit 158.00 Direct Materials 6 Kg WEE per kg 36.00 Direct Labour :1 Hrs X l12.50 per Hr 50.00 Variable overheads E Total Variable Cost 118.00 Contribution per unit 40.00 The Actual results for the rst quarter of 201 7 were as follows: Actual Sales units 13,000 generating sales value of 62,028,000 Material consumed was 76,000 Kg at a cost of 448,500 Total direct labour hours 50,000 at a cost of 665,000