The company set price by calculating the full standard cost of production & adding 30%

Each MKS uses 1 unit of Component A & the standard price of Component A is 18 per unit. The company used 3,600 units of Component A in the month

Each MKS should use 2 Kgs of Material B & the standard price of Material B is 13 per kg.

The company brought & used 9,000 Kgs of Material B in the period

Each unit should take 0.5 hours to make and the standard cost of labour is 15 per hour. 2,200 labour hours were worked during the period

The company have a factory wide overhead absorption rate of 28 per direct labour hour. The MKS takes 0.5 hours to make and therefore receives 14 of overhead per unit

490 units required some form of rework during the period. The rework target is 2% of production

There were 105 customer returns during the period. The target for all products is 2%.

The company operates a just in time production system

Profit & Loss Budget vs Actual Quarter 1 Budget Flexed Budget Actual Variance Demand 3700 3500 3500 Sales Revenue 315,055 298,025 332,101 34,076 Componant A 66,600 63,000 66,651 -3,651 Materials B 96,200 91,000 89,550 1,450 Labour 27,750 26,250 33,660 -7,410 Gross Prot 124,505 117,775 142,239 43,687 Indirect Cost 51,800 49,000 52,000 -3,000 Operating Profit 72,705 68,775 90,239 21,464