calculate in detailed pls
Jeremy firm produces NENE flavours water and the firm has the following standard cost structure showing the budgeted activity and the actual results: Budget Actual Production (bottles) Material (ltr) 10,000 7,200 10,800 8,320 6,000 ltrs 6,400 ltrs There have been issues about performance and bonus payments. As the firm's management accountant, you are asked to: Calculate the following variances: a. i. direct materials price variance Page 3 of 6 ACC2003213RD ii. direct materials usage variance (4 marks) You were given additional information, that there was a 5% price increase on material, this had not been included in the budget. b. Analyse the NENE flavours water production price variance to show the amount due to the price increase and other factors. (4 marks) c. The Procurement Manager feels that the 5% price increase explains the variance and he should still receive his bonus. Write a memo to the Procurement Manager i Discuss the impact on the variances calculated. You should consider whether this is a planning or operational variance (4 marks) ii Discuss briefly planning and operational variances (4 marks) iii State the advantages/benefits of implementing planning and operational variances (4 marks) iv The challenges of implementing planning and operational variances (3 marks) Professional marks will be awarded in this question for well laid out answers (2 marks) Total: 25 marks Jeremy firm produces NENE flavours water and the firm has the following standard cost structure showing the budgeted activity and the actual results: Budget Actual Production (bottles) Material (ltr) 10,000 7,200 10,800 8,320 6,000 ltrs 6,400 ltrs There have been issues about performance and bonus payments. As the firm's management accountant, you are asked to: Calculate the following variances: a. i. direct materials price variance Page 3 of 6 ACC2003213RD ii. direct materials usage variance (4 marks) You were given additional information, that there was a 5% price increase on material, this had not been included in the budget. b. Analyse the NENE flavours water production price variance to show the amount due to the price increase and other factors. (4 marks) c. The Procurement Manager feels that the 5% price increase explains the variance and he should still receive his bonus. Write a memo to the Procurement Manager i Discuss the impact on the variances calculated. You should consider whether this is a planning or operational variance (4 marks) ii Discuss briefly planning and operational variances (4 marks) iii State the advantages/benefits of implementing planning and operational variances (4 marks) iv The challenges of implementing planning and operational variances (3 marks) Professional marks will be awarded in this question for well laid out answers (2 marks) Total: 25 marks
