Question
The standard cost card of NetbacksLtd is shown below. The companymanufactures and distributes a single product known as Strangler cases. NetbacksLtd-StandardCostCard Product: Strangler Cases (Currentlyattainablestandards)
The standard cost card of NetbacksLtd is shown below. The companymanufactures and distributes a single product known as "Strangler cases."
NetbacksLtd-StandardCostCard Product: Strangler Cases
(Currentlyattainablestandards)
Description | Quantitiesand prices | Unit
|
Direct materials | 2.0kilos@ 0.80per kilo | 1.60 |
Directlabour | 4.00 | |
Fixedoverhead | 6.00perunitproduced | 6.00 |
Standardtotalunitcost: | 11.60 | |
Standardselling price: | 20.00 | |
Standardunitgrossprofit: | 8.40 |
Otherinformation:
The fixed overhead absorption rate is based on a consistent monthly production of1,500 units
ActualtradingresultsforApril2013are:
NetbacksLtd
ActualTradingResults(April2013)
Sales(for1,500unitssold) | 30,150 | |
Directmaterials(for2,700kilosconsumed) | 2,700 | |
Directlabour(405hoursrecorded) | 6,400 | |
Fixedoverhead(1,200unitsproduced) | 9,150 | |
Costof sales: | (18,350) | |
Grossprofit: | 11,900 |
NetbacksLtd(cont.) Required:
- Show detailed analysis of the variances from standard that will reconcile expected (standard) and actual profits for the most recent trading period
- Explaintheresultsofyourdetailedvariancecalculationsandthepossible causes for each variance
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started