I’m working on a business question and need guidance to help me study. Beacon Limited planned to produce 1,250 units of its only product during the month of May, of which it planned to sell 1,150 units. The standard cost data for this product is as follows: Per Unit (£) Direct materials 4 kg at £2.50 per kg 10.00 Direct labour 3 hrs at £6 per hr 18.00 Variable overhead 3 hrs at £4 per hr 12.00 Fixed overhead 20.00 60.00 Standard profit 15.00 Standard selling price 75.00 Budgeted fixed overhead for May was £25,000 During the month of May, a total of 1,300 units were produced.
The actual results for May were as follows: Sales (1,100 units at £80) 88,000 Direct materials (5,350 Kg at £2.60) 13,910 Direct labour (4,100 hrs at £6.10) 25,010 Variable overhead 15,580 54,500 Contribution 33,500 Fixed overhead 24,000 Profit £ 9,500 Required
(a) Calculate the following variances: i. Selling price variance and sales volume profit variance ii. Direct material price and usage iii. Direct labour rate and efficiency iv. Variable overhead expenditure and efficiency v. Fixed overhead expenditure and volume
(b) Based on the above calculations comment on the performance of the business last month.
(c) What other information may be useful to assist with the analysis of the results?
Requirements: 20
