Triform Limited operates a standard absorption costing system. During last month, it made only one product, the TR2. Using the following information, you are required to calculate as many variances as possible, discuss their causes and reconcile the budgeted profit with the actual profit. Standard cost card (for one unit of TR2)

Budgeted output and sales for last month = 800 units of TR2 Actual results for last month (700 units of TR2 produced and sold)

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4 kg @ £5/kg 3 hours @ £7/hour Direct materials 20 Direct labour 21 Variable overhead 3 hours @ £3/hour 3 hours @ £4/hour Fixed overhead 12 Standard cost 62 Standard profit margin Standard selling price 14 76 Sales revenue Direct materials used Direct labour hours worked Variable overhead incurred Fixed overhead incurred 700 @ £79 55,300 13,175 15,040 6,700 rev 3,100 kg @ £4.25/kg 2,350 hours @ £6.40/hour 9,200