ABC Ltd. operates a standard absorption costing system now, and both variable and fixed overheads are...

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ABC Ltd. operates a standard absorption costing system now, and both variable and fixed overheads are absorbed at a budgeted direct labour hours. The summary production and sales budget of ABC Ltd. with a single product "AB" for Nov. 202x as follows: Production and Sales quantity Sales revenue: Production costs: Direct material --A --B Direct labour Variable production overheads Fixed production overheads Sales revenue: Production costs: Direct material 7,200 kgs 2,400 kgs 4,800 hours --B Direct labour Variable production overheads Fixed production overheads 2,400 units £192,000 During Nov. 202x, the actual production and sales of "AB" was 3,000 units and with sales and cost information as follows: 9,400 kgs 2,900 kgs 5,500 hours 36,000 19,200 33,600 7,200 24,000 £234,000 45,000 23,500 39,600 8,800 25,000 Required: a). Extract the standard cost card of product "AB" based on the giving information. b). Prepare a statement that reconciles the budgeted profit with the actual profit for Nov. 202x, showing all individual variances in as much detail as the above data provides. (Note: Fixed production overhead sub-variances of capacity and volume efficiency are required). 15 ABC Ltd. operates a standard absorption costing system now, and both variable and fixed overheads are absorbed at a budgeted direct labour hours. The summary production and sales budget of ABC Ltd. with a single product "AB" for Nov. 202x as follows: Production and Sales quantity Sales revenue: Production costs: Direct material --A --B Direct labour Variable production overheads Fixed production overheads Sales revenue: Production costs: Direct material 7,200 kgs 2,400 kgs 4,800 hours --B Direct labour Variable production overheads Fixed production overheads 2,400 units £192,000 During Nov. 202x, the actual production and sales of "AB" was 3,000 units and with sales and cost information as follows: 9,400 kgs 2,900 kgs 5,500 hours 36,000 19,200 33,600 7,200 24,000 £234,000 45,000 23,500 39,600 8,800 25,000 Required: a). Extract the standard cost card of product "AB" based on the giving information. b). Prepare a statement that reconciles the budgeted profit with the actual profit for Nov. 202x, showing all individual variances in as much detail as the above data provides. (Note: Fixed production overhead sub-variances of capacity and volume efficiency are required). 15

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