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Please do asap and clearly show all workings Alabama Limited is a manufacturer of decorative cement pots. The company provides the following information about its
Please do asap and clearly show all workings
Alabama Limited is a manufacturer of decorative cement pots. The company provides the following information about its standard costs for the year 2020: Per unit ($) 86.00 18.00 Standard selling price Direct material 1.5 kg at $ 12 per kg Direct labour - 4.4 hours at $ 7.5 per hour Fixed production overheads: 4.4 hours at $5 per hour Standard profit per unit 33.00 22.00 13.00 The budgeted production and sales for the month October 2020 were 520 units. On 01 November, the following actual figures were available for October 2020: Sales Production Direct materials Direct Labour Fixed production overheads 550 units at $ 85 each. 550 units. 785 kg at $ 12.40 per kg. 2400 hours at $ 7.80 per hour. $ 12,500. Required: (a) Calculate the following variances: i. Direct material price and usage variances. ii. Direct labour rate and efficiency variances. iii. Fixed overheads expenditure, efficiency and capacity variances. iv. Sales price variance. v. Sales volume variance. (18 marks) (b) Calculate the actual profit for October based on 550 units. (2 marks) (c) Prepare a Reconciliation Statement to reconcile budgeted profit with actual profit of 550 units. (Absorption costing) (6 marks) In a meeting reviewing the budget of 2018 and 2019, a director suggested that the production manager should be fully accountable for the adverse variances of direct materials and direct labour in those two periods. The production manager explained that due to the main supplier's failure to supply the required materials, he had to ask the manager of the purchasing department to buy the materials from another supplier. This had caused a delay in production. (d) Discuss whether or not the production manager should be fully accountable for the adverse variances in direct materials and direct labour? Justify your answer. (4 marks)
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