Hi, I would to get answers for the following question. Thank you!

Task 1

Requirement: Standard Costing & Variance Analysis

Hungry Jane, a local restaurant, has been examining the profitability of its set menu. At the beginning of the year the selling price was based on the following predicted costs:

RM

Entre : Soup of the day

100 grams of mushrooms@ RM4.00 per kg0.40

Cream and other ingredients0.20

Main course : Roast turkey

Turkey 0.10 kg@ RM14.00 per kg1.40

Potatoes 0.2 kg@ RM0.25 per kg0.05

Vegetables 0.3 kg @ RM0.90 per kg0.27

Other ingredients and accompaniments0.23

Dessert : Fresh tropical fruit salad

Fresh fruit 0.15 kg @ RM3.00 per kg0.45

The selling price was set at RM7.50, which produced an overall gross profit of 60%. During October the number of set menus sold was 860 instead of the 750 budgeted: this increase was achieved by reducing the selling price to RM7.00. During the same period an analysis of the direct costs incurred showed:

RM

90 kg of mushrooms 300

Cream and other ingredients 160

70 kg of turkeys 1,148

180 kg of potatoes 40

270 kg of vegetables 250

Other ingredients and accompaniments 200

140 kg of fresh fruits 450

There was no stock of ingredients at the beginning or end of the month.

Required:

a. Calculate the budgeted profit for the month of October.

(1)

b. Calculate the actual profit for the month of October.

(1)

c.Prepare a statement which reconciles your answers to (a) and (b) above, showing the variances in as much detail as possible.

d. Prepare a report, addressed to the restaurant manager, which identifies the two most significant variances, and comments on their possible causes.