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Mickey Limited is a manufacturing business that uses a standard costing system. The companys flexed budget for April 20X9 is: Sales 173,340 Costs Direct materials

“Mickey Limited is a manufacturing business that uses a standard costing system. The company’s flexed budget for April 20X9 is:

Sales

£173,340

Costs

Direct materials

(£22,500)

Direct labour

(£37,684)

Variable production overheads

(£15,520)

Fixed production overheads

(£49,400)

Profit

48,236

The company’s directors are presented with the following standard cost operating statement for the month:”

Total

Original budgeted net profit

£44,540

Favourable

(Adverse)

Sales profit volume variance

£3,696

Sales price variance

£424

Direct materials price variance

£1,372

Direct materials quantity variance

£2,560

Direct labour rate variance

-

-

Direct labour efficiency variance

£480

Production overhead variance

£240

Other overhead variance

£3,360

Total

£9,092

£3,040

£6,052

Actual net profit

£50,592

“Required:”

  1. “Calculate the actual figures for sales, direct materials, direct labour, variable overheads, fixed overheads and profits.”
  2. “Outline for the directors the main points about the company’s performance during April 20X9.”

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