- Reconciliation
Workings
Sales price $
15,400 units should sell for 2,156,000
They did sell for 2,129,050
––––––––
Sales price variance 26,950 (A)
––––––––
Materials 003 kg
15,400 units should use 92,400
They did use 98,560
––––––
Material 003 usage variance (kg) 6,160 (A)
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Standard price/kg $12.25
Usage variance in $ $75,460 (A)
Materials 003 $
98,560 kg should cost (× $12.25) 1,207,360
They did cost 1,256,640
––––––––
Material price variance 49,280 (A)
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Materials GL60 kg
15,400 units should use 46,200
They did use 42,350
Material 003 usage variance (kg) 3,850 (F)
––––––
Standard price/kg $3
20
Usage variance in $ $12,320 (F)
Materials GL60 $
42,350 kg should cost (× $3.20) 135,520
They did cost 132,979
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Material price variance 2,541 (F)
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Actual hours worked = $612,766 ÷ $8.65 = 70,840 hours
Labour efficiency Hours
15,400 units should take 69,300
They did take 70,840
–––––––
Labour efficiency variance (hrs) 1,540 (A)
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Standard rate/hour $8.40
Efficiency variance in $ $12,396 (A)
Labour rate $
70,840 hours should cost
(× $8.40) 595,056
They did cost 612,766
–––––––
Material price variance 17,710 (A)
–––––––
$
Fixed overhead expenditure
Budgeted fixed overhead costs 86,400
Actual fixed overhead costs 96,840
–––––––
Expenditure variance 10,440 (A)
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Reconciliation
Standard profit on 15,400 units of sale, on previous page |
$
207,740 |
|
Fav |
Adverse |
|
Variances: |
$ |
$ |
|
Sales price |
|
26,950 |
|
Materials 003 usage |
|
75,460 |
|
Materials GL60 usage |
12,320 |
|
|
Materials 003 price |
|
49,280 |
|
Materials GL60 price |
2,541 |
|
|
Labour efficiency |
|
12,936 |
|
Labour rate |
|
17,710 |
|
Fixed overhead expenditure variance |
|
10,440 |
|
|
14,861 |
192,776 |
|
Total variances |
|
|
177,915 A |
Actual profit |
|
|
29,825 |