The budgeted production is $24,000$ units per annum evenly spread throughout the year, with each

calendar month assumed to be equal. March is a bad month in terms of sales revenue and it is

expected that sales will only be $1,700$ units during the month. Fixed overheads were expected to be

$$144,000$ per year and are absorbed on a labour hour basis.

Actual results for the month of March were that sales were $2,200$ units at a price of $$90.$ There was

no change in stock of finished goods or raw materials.

The purchases during the month were $11,300$kg of material X at $$2\mathrm{.}80$ per kg and $8,300$kg of material

Y at $$5\mathrm{.}30$ per kg$.$

$4,800$ labour hours were worked at a rate of $$8\mathrm{.}10$ per hour and $1,600$ hours at $$8\mathrm{.}30.$

The actual variable overheads for the period were $$33,000$ and the fixed overheads were $$12,500.$

The company uses an absorption costing system and values its raw materials at standard cost.

Required:

Calculate appropriate variances for the month of March in as much detail as possible and present an

operating statement reconciling budgeted profit with actual profit.