Able Machines Ltd. makes machine tools. At the start of 2019, the company expected to make...

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Able Machines Ltd. makes machine tools. At the start of 2019, the company expected to make and sell 6,000 machine tools in the year and each Machine tool was expected to sell for €40. Each Machine tool has the following specifications: Per Machine Tool Direct Materials Direct Labour 0.75kg 20 mins Variable overhead was budgeted to be €50,000. The following information relates to the 12 months ending 31st of December 2019, the end of the year under review. All Machine tools sold in the year were produced in the year. Sales volumes were 10% higher than budgeted. Total sales revenue was €277,200. The company used 5,280kg of direct materials at a total cost of €52,800. The labour cost was €36,300 and each Machine tool took 15 minutes of direct labour to produce. Variable Overhead was €54,000 in the year. Required: a) Calculate the budgeted contribution b) Calculate the actual contribution Rate €10 per kg €20 per hour c) Calculate the following variances: (i) Materials Price (ii) Materials Usage (iii) Labour Rate (iv) Labour Efficiency (v) Variable Overhead Expenditure Variance (vi) Variable Overhead Efficiency Variance (vii) Sales Margin Price Variance (viii) Sales Margin Volume Variance d) Reconcile the actual and budgeted contribution (4 marks) (6 marks) (4 marks) (4 marks) (4 marks) (4 marks) (4 marks) (4 marks) (4 marks) (4 marks) (8 marks) Able Machines Ltd. makes machine tools. At the start of 2019, the company expected to make and sell 6,000 machine tools in the year and each Machine tool was expected to sell for €40. Each Machine tool has the following specifications: Per Machine Tool Direct Materials Direct Labour 0.75kg 20 mins Variable overhead was budgeted to be €50,000. The following information relates to the 12 months ending 31st of December 2019, the end of the year under review. All Machine tools sold in the year were produced in the year. Sales volumes were 10% higher than budgeted. Total sales revenue was €277,200. The company used 5,280kg of direct materials at a total cost of €52,800. The labour cost was €36,300 and each Machine tool took 15 minutes of direct labour to produce. Variable Overhead was €54,000 in the year. Required: a) Calculate the budgeted contribution b) Calculate the actual contribution Rate €10 per kg €20 per hour c) Calculate the following variances: (i) Materials Price (ii) Materials Usage (iii) Labour Rate (iv) Labour Efficiency (v) Variable Overhead Expenditure Variance (vi) Variable Overhead Efficiency Variance (vii) Sales Margin Price Variance (viii) Sales Margin Volume Variance d) Reconcile the actual and budgeted contribution (4 marks) (6 marks) (4 marks) (4 marks) (4 marks) (4 marks) (4 marks) (4 marks) (4 marks) (4 marks) (8 marks)

Answer rating: 100% (QA)

a Budgeted Contribution Total Budgeted Revenue 6000 x 40 240000 Total Budgeted Costs Direct Material... View the full answer