Question 3

a)The Walter Group provides the following data for June 2019 when 15,000 units were manufactured.

Standard Material cost (per Unit) &..g@$7.50 per Kg.

Actual Material cost (Per U..g@$13.5 per Kg.

Standard Labour cost (Per Unit)5.5hrs@$15 per hour

Actual Labour cost (Per Unit) &..s@$12.2 per hour

Calculate the following:

1.Direct Material Variance

2.Direct Material Quantity/Usage Variance

3.Total Material Cost Variance

4.Direct Labour rate Variance

5.Direct Labour efficiency Variance

6.Total Labour Cost Variance

b)Calculate variable overhead spending variance if actual labour hours used are 260, standard variable overhead rate is $10.40 per direct labour hour and actual variable overhead rate is $9.30 per direct labor hour. Also specify whether the variance is favourable or unfavourable.

Define the term Variance Analysis and highlight its Advantages and Disadvantages

Question 4

a)Underline the main components which are considered while preparing a budget in a

Company. What are the major considerations business owners should make as they budget and forecast ?

b)Prepare Cash budget for the Quarter April To June based on the following data and additional information.

MonthSales($)Purchase($)Wages($)Overheads($)

Jan60,00036,0009,00010,000

Feb62,00038,0008,0009,500

Mar64,00033,00010,00011,500

Apr58,00035,0008,5009,000

May56,00039,0009,0009,500

Jun60,00034,0008,0009,000

Additional Information :

1.Cash balance at 1^st April is $800,000

2.Sales is 40% cash sales and 60% is collected in the following month.

3.All purchases of a month are paid after 2 months.

4.Land was purchased in April for $85,000

5.Wages of a month are paid the following month. All overheads are paid the same month.

6.Loan repaid in May $16,000

7.Dividend of $75,000 is expected to be received in May.