QUESTION

 Standard Cost for Product RBT

Materials (10kg x Rs.8 per kg)
Labour (5hrs x Rs.6 per hour)
Variable Overhead (5hrs x Rs. 8 per hour)   
Fixed Overhead (5hrs x Rs.9 per hour)
 
Budgeted Results      
Production
Sales
Selling Price

Actual Results      
Production
Sales
Materials
Labour
Variable Overhead
Fixed Overhead
Selling Price

ANSWER

Budgeted Profit Statement

Sales ( 300 * 7500 )

Production Cost
Material Cost (80 * 10000 )
Labour Cost (30 * 10000 )
Variable Overhaed ( 40 * 10000 )
-Closing Stock ( 195 * 2500 )
Budgeted Contribution
Fixed Overhead
Budgeted Profit

Actual Result Statement

Sales ( 260 * 6000 )

Production Cost
Material Cost
Labour Cost
Variable Overhaed
-Closing Stock ( 195 * 2000 )
Budgeted Contribution
Fixed Overhead
Budgeted Profit

Reconcilation Statement

Budgeted Profit

Material Price Variance

Material Usage Variance

Labour Rate Variance

Labour Efficiency Variance

Variable Overhead Expenditure Variance

Variable Overhead Efficiency Variance

Fixed Overhead Expenditure Variance

Fixed Overhead Volume Variance
Fixed Overhead Efficiency Variance
Fixed Overhead Capacity Variance

Sale Price Variance

Sale Volume Variance

Actual Profit
 Rs.
80
30
40
45

 
10000 units
7500 units
Rs.300 per unit

 
8000 units
6000 units
85000 kg Cost Rs.700000
36000 hours Cost Rs. 330900
Rs. 400000
Rs. 500000
Rs. 260 per unit

2,250,000

800,000
300,000
400,000
-487,500 1,012,500
1,237,500
-450,000
787,500

1560000

700000
330900
 400000
-390000 1040900
519100
500000
19100

787,500

20000 (A)
40000 (A) -60,000

114900 (A)
24000 (F) -90900

112000 (A)
32000 (F) -80000

50000 (A)
90000 (A)
36000 (F)
126000 (A) -230000

240000 (A)
157500 (A) -397500

-70,900
Variance Analysis
Material Variance
Material Price Variance (SP - AP ) * AQ
[8-(700/85)]*85000
-20000 A

Material Usage Variance (SQ - AQ) * SP

(80000-85000)*8
-40000 A
Labour Variance
Labour Rate Variance (SR - AR) * AH
[6-(330900/36000)]*36000
-114900 A

Labour Efficiency Variance (SH - AH) * SR

(40000-36000)*6
24000 F

Variable Overhead Variance

Variable Overhead Expenditure Variance (AH * SR) - Actual Exp.
(36000*8)-400000
-112000 A

Variable Overhead Efficiency Variance (SH - AH) * SR

(40000-36000)*8
32000 F
Fixed Overhead Variance
Fixed Overhead Expenditure Variance Budgeted Exp. - Actual Exp
450000-500000
-50000 A

Fixed Overhead Volume Variance (SH-BH)*SR

(40000-50000)*9
-90000 A

Fixed Overhead Efficiency Variance (SH - AH) * SR

(40000-36000)*9
36000 F

Fixed Overhead Capacity Variance (AH - BH) * SR

(36000-50000)*9
-126000 A

Sales Variance
Sales Price Variance (SP - AP) * AQ
(300-260) * 6000
240000 A

Sales Volume Variance (BQ-AQ) * Sale Margin

(7500-6000)(300-195)
157500 A