\n<\/p>\n

<\/p>\n

Orchid Ltd is a furniture manufacturer<\/span><\/span>. <\/span>One of its products, a table<\/span><\/span>,<\/span><\/span> has the following standard costs: <\/span><\/span><\/span><\/p>\n

\u00a3<\/span><\/strong><\/p>\n

Direct materials (8m @ \u00a33\/m)<\/span><\/span> 24.00<\/span><\/span><\/p>\n

Direct labour (1 hour @ \u00a325\/hr)<\/span><\/span>25.00<\/span><\/span><\/p>\n

Fixed overheads<\/span><\/span> 16.00<\/span><\/u><\/p>\n

65.00<\/span><\/span><\/p>\n

Selling price<\/span><\/span> 95.00<\/span><\/u><\/p>\n

Standard profit margin<\/span><\/span> 30.00<\/span><\/u><\/p>\n

The table is made from solid oak and the above materials reflect the size of the table in square metres<\/span><\/span>. <\/span><\/span><\/p>\n

The monthly production and sales are planned to be 800 units<\/span><\/span>. <\/span>The actual results for March were as follows:<\/span><\/span><\/span><\/p>\n

<\/span>\u00a3<\/span><\/strong><\/p>\n

Sales revenue<\/span><\/span> 75,330<\/span><\/span><\/p>\n

Less <\/span>Direct materials<\/span><\/span>(19,250)<\/span><\/span>(7,000m)<\/span><\/span><\/span><\/p>\n

Direct labour<\/span><\/span>(22,100)<\/span><\/span>(850 hours)<\/span><\/span><\/p>\n

Fixed overheads<\/span><\/span> (<\/span><\/span>13,000)<\/span><\/u><\/p>\n

Operating profit<\/span><\/span> 20,980<\/span><\/u><\/p>\n

There was no opening or closing stocks<\/span><\/span>. <\/span>The company manufactured and sold 810 tables.<\/span><\/span><\/span><\/p>\n

Required:<\/span><\/strong><\/p>\n

a) Calculate the flexed and actual budget<\/span><\/strong><\/p>\n

b) Calculate the following variances<\/span><\/strong>:<\/span><\/strong><\/span><\/p>\n

Sales variances; volume and price<\/span><\/strong><\/p>\n

Direct material variances; usage and price<\/span><\/strong><\/p>\n

Direct labour variances; efficiency and rate<\/span><\/strong><\/p>\n

Fixed overhead variance; spending<\/span><\/strong><\/p>\n

c) Present the above information as a part of a Business Report, providing possible explanations for the variances that you have calculated and suggestions as to how the company might try to improve its cost control.<\/span><\/strong><\/span><\/p>\n

<\/em>
<\/span><\/strong><\/p>\n

<\/span>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Orchid Ltd is a furniture manufacturer. One of its products, a table, has the following standard costs: \u00a3 Direct materials (8m @ \u00a33\/m) 24.00 Direct labour (1 hour @ \u00a325\/hr)25.00 Fixed overheads 16.00 65.00 Selling price 95.00 Standard profit margin 30.00 The table is made from solid oak and the above materials reflect the size […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_joinchat":[]},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts\/263754"}],"collection":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/comments?post=263754"}],"version-history":[{"count":0,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts\/263754\/revisions"}],"wp:attachment":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/media?parent=263754"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/categories?post=263754"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/tags?post=263754"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}