Question B3 The standard cost card of Netbacks Ltd is shown below. The company manufactures and...

  

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Question B3 The standard cost card of Netbacks Ltd is shown below. The company manufactures and distributes a single product known as "Strangler cases. Description Direct materials Direct labour Fixed overhead Netbacks Ltd - Standard Cost Card Product: Strangler Cases (Currently attainable standards) Quantities and prices 2.0 kilos @ £0.80 per kilo 15 minutes @ £16.00 per hour £6.00 per unit produced 1.60 4.00 6.00 Standard total unit cost: 11.60 Standard selling price: 20.00 Standard unit gross profit: 8.40 Other information: The fixed overhead absorption rate is based on a consistent monthly production of 1,500 units Actual trading results for April 2013 are: Netbacks Ltd Actual Trading Results (April 2013) Sales (for 1,500 units sold) Direct materials (for 2,700 kilos consumed) Unit £ £ 2,700 £ 30,150 Netbacks Ltd (cont.) Required: 1. Pre a. Gross profit: 11,900 Prepare a detailed analysis the variances from standard that will reconcile expected (standard) and actual profits for the most recent trading period 4747 (15 marks) 8 Page b. Explain the results of your detailed variance calculations and the possible causes for each variance Question B3 The standard cost card of Netbacks Ltd is shown below. The company manufactures and distributes a single product known as "Strangler cases. Description Direct materials Direct labour Fixed overhead Netbacks Ltd - Standard Cost Card Product: Strangler Cases (Currently attainable standards) Quantities and prices 2.0 kilos @ £0.80 per kilo 15 minutes @ £16.00 per hour £6.00 per unit produced 1.60 4.00 6.00 Standard total unit cost: 11.60 Standard selling price: 20.00 Standard unit gross profit: 8.40 Other information: The fixed overhead absorption rate is based on a consistent monthly production of 1,500 units Actual trading results for April 2013 are: Netbacks Ltd Actual Trading Results (April 2013) Sales (for 1,500 units sold) Direct materials (for 2,700 kilos consumed) Unit £ £ 2,700 £ 30,150 Netbacks Ltd (cont.) Required: 1. Pre a. Gross profit: 11,900 Prepare a detailed analysis the variances from standard that will reconcile expected (standard) and actual profits for the most recent trading period 4747 (15 marks) 8 Page b. Explain the results of your detailed variance calculations and the possible causes for each variance

Answer rating: 100% (QA)

Requirement 1 Standard Gross Profit 1260000 Add Revenue Variance Sales price variance 15000 Sales quantity variance 15000 Less Cost variance Direct Materials price Variance 54000 Direct Materials Quan... View the full answer