Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ondunga Ball (Pty) Ltd currently makes use of a direct costing system. The company manufactures and sells two types of tennis balls, Donkey and Antelope.

image text in transcribed
image text in transcribed
Ondunga Ball (Pty) Ltd currently makes use of a direct costing system. The company manufactures and sells two types of tennis balls, Donkey and Antelope. Total budgeted fixed manufacturing overhead costs for June 2020 amounted to NS21 000 using machine hours as a basis (traditional approach) Donkey Antelope Budgeted production Volume (tennis balls) 860 1 040 "The actual production volume for June 2020 was in line with the budgeted production figures STANDARD REQUIREMENTS The standard requirement per tennis ball are as follows: Donkey Antelope Direct material: Rubber (grams) 49 50 Direct material: Fabric cover (grams) 6 Direct labour (minutes) 18 15 Overall machine time (minutes) 30 30 BUDGETED DATA FOR JUNE 2020 9 Deuce Ace 800 1 000 Sales volume (number of balls) Selling price per ball (NS) Direct raw material: Rubber (per gram) 40 35 160 16c 8C N$20 N$2 Direct raw material: Fabric cover (per gram) 8c Direct labour recovery rate (per direct labour) N$20 Variable overhead recovery rate (per direct labour) N$2 ACTUAL DATA FOR JUNE 2020 Donkey Sales volume (number of units) 860 Actual sales N$33 540 Antelope 1 040 N$39 520 Purchased and used direct raw material: Rubber - 90 kg for N$13 500 Purchased and used direct raw material: Fabric cover - 10.8kg for N$7 020 Direct labour rate: NS18 per direct labour hour Variable overhead rate: NS1.80 per direct labour hour Total fixed manufacturing overheads N$25 000 JULY 2020 BUDGET The production manager has the following information available for July 2020 1. The budgeted units to be produced for July 2020 is 930 Donkey tennis balls and 1 260 Antelope tennis balls respectively, 2. The required minutes per product in terms of direct labour will remain the same as in June 2020 3. The contribution per Donkey tennis ball will be N$30,36 and the contribution per Antelope tennis ball will be N$27.62. Required: Calculate the sales volume contribution variance per tennis ball for Donkey in June 2020

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Accounting Volume 2 Managerial Accounting

Authors: OpenStax

1st Edition

0357364805, 9780357364802

More Books

Students also viewed these Accounting questions

Question

What is a closed end fund? Describe how closed end funds function.

Answered: 1 week ago