Question 04 variance

Following data relate to the budget and actual result of a "Cosmo" firm that makes and sell a single product and that employs standard marginal costing

BudgetActual

Production10,000unitsProduction10,500units

Sales10,000unitsSales10,500units

$$

Sales130,000Sales190,200

(Less)

Standard Marginal CostActual Marginal Cost

-Materials10,000-Materials11,000

-Labor40,000 -Labor63,500

-Var. Overhead40,00090,000-Var. Overhead83,500158,000

=Contribution40,000=Contribution 32,200

(Less)

Fixed Costs15,000Fixed Costs15,800

Budgeted Profit25,000Actual Profit16,400

The standard cost card for the product is as follows

$

Material 5Kgs at 20cnt/Kg1.00

Labor 4hrs at $1.00/hour4.00

Var. Overhead 4hrs at $1/hour4.00

=Standard Marginal Cost9.00

Standard contribution4.00

Standard Selling price13.00

During the period material usage was 50,000kgs and 40,000 labor hours were needed to finish the product

Calculate

1. Operating Profit Variance
2. Direct Material Variance, Direct Labor Variance, Variable Overhead Variance, Fixed Overhead Variance
3. Prepare summery of cost variance
4. Calculate sales variance and overall variance by using cost and sales variance
5. prepare a statement to show the change from budgeted to actual Profit by using variances