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Prepare a marginal cost operating statement for the month of November, reconciling the budgeted contribution to the actual profit using as many variances as the
Prepare a marginal cost operating statement for the month of November, reconciling the budgeted contribution to the actual profit using as many variances as the data permit
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A company's budgeted production of Product Zimba for the month ending 30 November 2019 was 10,000 units. The fixed overheads were budgeted at Rs 3,200,000. The standard costs for the product are: Direct materials 6 litres of material A at Rs30 per litre Direct labour 4 hours at Rs50 per hour Variable overhead is absorbed at Rs40 per labour hour The manufacturer operates a standard marginal costing system and the standard selling price is set based on a mark-up of 25%. The actual results for the month ended 30 November 2019 were: Production : 9,800 units Direct materials : 59,700 litres at a total cost of Rs 1,761,150 Direct labour : 39,500 hours at a total cost of Rs 1,920,800 Variable overheads incurred: Rs 1,542,000 Fixed overheads incurred : Rs 3,120,000 During the month of November 2019, the company managed to sell all the quantity produced by offering a 3 % discount on the standard price
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