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CA 6 Apr 2020 Actual Flexible Budget

The document provides information on the standard and actual costs incurred during a month for a product called Diket. It shows that 320,000 units were produced which incurred total actual costs of Rs. 754,000. This resulted in a favorable flexible budget variance of Rs. 89,000 but an unfavorable static/standard budget variance of Rs. 129,000 compared to the budgeted costs.

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Rachel Gloria
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58 views4 pages

CA 6 Apr 2020 Actual Flexible Budget

The document provides information on the standard and actual costs incurred during a month for a product called Diket. It shows that 320,000 units were produced which incurred total actual costs of Rs. 754,000. This resulted in a favorable flexible budget variance of Rs. 89,000 but an unfavorable static/standard budget variance of Rs. 129,000 compared to the budgeted costs.

Uploaded by

Rachel Gloria
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Diket: Standard Cost Per Unit

Qty/Unit Price Cost/Unit


Direct material 1 10
Direct labour 1 8
Variable overheads 1 4
Fixed overheads [based on a
budgeted output of 12,000
units] 1 3
TOTAL COST 4 25

Planned Units Produced 25,000


Planned Selling Price Per Unit

During one particular month …..…... units of the product were manufactured and sold incurring the following ACTUA
Qty Used Total Cost
Direct materials 320,000 320,000
Direct labour 220,000 220,000
Variable overheads 125,000 125,000
Fixed overheads 89,000 89,000
TOTAL COST 754,000

Sales
Net profit

ANSWER:
ACTUAL
Unit Produced

Actual Actual Actual


LEVEL 2 Sales Qty Price Sales Selling Price Variance
-

Actual Actual Actual Cost


LEVEL 2 Material Qty Price Flexible Budget Variance
30,000 10.67 320,000 320,000 U

Price Efficiency
LEVEL 3 Variance Variance
320,000 U -

Actual Actual
Actual Cost
LEVEL 2 Labor Hour Price Flexible Budget Variance
39,000 5.64 220,000 92,000 F
Price Efficiency
LEVEL 3 Variance Variance
92,000 F -

Actual Actual
Actual Cost
LEVEL 2 Variable Overhead Hour Price Flexible Budget Variance
39,000 3.21 125,000 31,000 F

Spending Efficiency
LEVEL 3 Variance Variance
31,000 F -

Actual Actual Actual Cost Flexible Budget Variance/


Qty Price
LEVEL 2 Fixed Overhead Spending Variance
30,000 2.97 89,000 14,000 U

Total Fixed Production


Overhead Volume
LEVEL 3 Variance Variance
14,000 U -

TOTAL COST 754,000

OPERATING INCOME (754,000)

TOTAL Flexible Budget Variance (E-L)


89,000
LEVEL 2

STATIC BUDGET VARIANCE (E-P


LEVEL 1
129,000
curring the following ACTUAL cost:

FLEXIBLE BUDGET STATIC/STANDARD BUDGET

Actual Standard Flexible Standard Standard Standard


Qty Price Sales Qty Price Sales

Unit Produced x Standard Flexible Cost Standard Qty Standard Standard Cost
Standard Qty Price 2 / unit Price

30,000 10 300,000 25,000 10 250,000

Unit Produced x Standard Standard Hour Standard


Flexible Cost Standard Cost
Standard Hour Price 0.8 / unit Price

39,000 8 312,000 25,000 8 200,000


Unit Produced x Standard Standard Hour Standard
Standard Hour Price Flexible Cost 0.4 / unit Price Standard Cost

39,000 4 156,000 25,000 4 100,000

Actual Price Standard Cost Standard Qty Standard Standard Cost


Qty Price

30,000 2.5 75,000 25,000 3 75,000

843,000 625,000

(843,000) (625,000)

ance (E-L)

Sales Volume Variance (L-P)


218,000

TIC BUDGET VARIANCE (E-P)

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