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N 08 44. Reverse Working with given Reconciliation Statement and Variances The following Profit Reconciliation Statement has been prepared by the Cost Accountant of RSQ Ltd for March. (in) 2,40,000 Budgeted Profit 51,000 (F) Sales Price Variance Sales Volume Profit Variance 42,000 (A) 2,49,000 Material Price Variance 15,880 (A) Material Usage Variance 3,200 (F) Labour Rate Variance 78,400 (F) Labour Efficiency Variance 32,000 (A) Variable Overhead Expenditure Variance 8,000 (F) Variable Overhead Efficiency Variance 12,000 (A) Fixed Overhead Volume Variance 1,96000 (A) Fixed Overhead Expenditure Variance 4,000 (F) Actual Profit 86,720 Budgeted Production and Sales volumes for March were equal and the level of Finished Goods Stock was unchanged. But the Stock of Raw Materials decreased by 6,400 kg (valued at Standard Price) during the month. The Standard Cost Card is as under: Material 4 kg at 32.00 8.00 Labour 4 hours at 32.00 128.00 Variable Overhead 4 hours at 12.00 48.00 Fixed Overhead 4 hours at 28.00 112.00 296.00 Standard Profit 24.00 Standard Selling Price 320.00 You are required to calculate: 1. Actual Production and Sales Volume 3. Actual Number of Hours worked 2. Actual Quantity of Material purchased 4. Actual Variable and Fixed Overhead Cost incurred Solution: 15,000 45. Reverse Working with given Reconciliation Statement and Variances The following figures are available. Find out the missing figures, giving appropriate formulae Budgeted Profit Less: Adverse Variances: Contribution Price Variance Direct Material Variance Fixed Overhead Variance 10,600 1,000 600 12,200 2,800 Add: Favourable Variances: Contribution Quantity Variance Direct Wages Variance Variable Overhead Variance 1,800 600 1,800 4,200 7,000 Actual Profit There is no inventory. Also, Production Units = Sales Units for both actual and budget. Other information: Standard Selling Price 18 per unit Actual Labour Hours at Actual Rate Standard Variable Cost 15 per unit Actual Labour Hours at Standard Rate Standard Contribution 3 per unit Variable Overhead Standard Rate Actual Selling Price 17 per unit Standard Hours of Production Budgeted Sales 10,000 units Variable Overhead at Standard Rate Std Material Cost p.u. 1 (5 kg at 20 paise / kg) Variable Overhead Expenditure Variance Material Usage Variance 400 (Adv) Budgeted Fixed Overhead 63,000 61,950 2 4 hrs per unit 84,800 400(A) 15,000 Find out the following: 1. Actual Sales Units 2. Actual Sales Rupees 3. Actual Quantity of Raw Materials used 4. Labour Efficiency Variance 5. Actual Variable Overhead in Rupees 6. Variable Overhead Efficiency Variance 7. Actual Fixed Overheads 8. Operating Profit Variance 40. Reverse Working - Materials, Labour and VOH Variances M 93 METACLEN Ltd provides the following information relating to 1,000 units of product 'ZED' during April Standard Price per kg. of Raw Material 3 Standard VOH per Direct Labour Hour 1 Actual Total Direct Material Cost 10,000 Standard VOH cost per unit of ZED * 1.60 Standard Direct Labour Hours 1,600 Total Standard Variable Overhead * 1,600 Actual Direct Labour Hours 1,800 Actual Total Variable Overheads * 1,620 Total Standard Direct Labour Cost *8,000 The Material Usage Variance is 600 adverse and the Overall Cost Variance per unit of ZED is * 0.07 Adverse as compared to the Total Standard Cost per unit of ZED of 21. Compute the following - i. Standard Quantity of Raw Materials per unit of ZED. 7. Actual Direct Labour Rate per hour. 2. Standard Direct Labour Rate per hour. 8. Material Price Variance. 3. Standard Direct Material Cost per unit of ZED. 9. Labour Rate Variance. 4. Standard Direct Labour Cost per unit of ZED. 10. Labour Efficiency Variance. 5. Standard Total Material Cost for the output. 11. Variable Overhead Expenditure Variance. 6. Actual Total Direct Labour Costs for the output. 12. Variable Overhead Efficiency Variance