Case: Simple Jeans

Simple Jeans is preparing its budget for the next 12 months and uses zerobased budgeting. The budgeted sales price is $44.90 per unit and the budgeted volume of production and sales for the next 12 month period is 100,000 units. The material and labour requirements to produce one pair of jeans are as follows:

Direct Materials 2.5 m $6.50 per metre

Direct Labour 0.6 DLH $16.75 per labour hour

Machine hours are used to allocate both variable overheads and fixed overheads. Each pair of jeans uses 0.35 machine hours. The budgeted variable overhead costs are $1,170,000 while the budgeted fixed overhead costs are $356,200 for the year.

The picture attached below provided with the following detailed actual results and actual costs for the year.

Use the information to solve question A

Question 112 pts

Calculate the flexible budget variance for direct materials for Simple Jeans.

Give your answer in 2 decimal places and in absolute dollar value (negative not required).

Flag question: Question 12

Question 122 pts

Calculate the flexible budget variance for direct labour for Simple Jeans.

Give your answer in 2 decimal places and in absolute dollar value (negative not required).

Flag question: Question 13

Question 132 pts

Calculate the flexible budget variance for variable overhead for Simple Jeans.

Give your answer in 2 decimal places and in absolute dollar value (negative not required).

Flag question: Question 14

Question 142 pts

Calculate the sales price variance for Simple Jeans.

Give your answer in 2 decimal places and in absolute dollar value (negative not required).

Flag question: Question 15

Question 152 pts

Calculate the operating income variance for Simple Jeans.

Give your answer in 2 decimal places and in absolute dollar value (negative not required).

fx Simple Jeans