The CNC company have acess to the following information to prepare for the budget.

Direct Materials: Cost RM1 per kg, and required amount per unit is 2.5kg. The number of hours workers require to finish a product is 2 hours. The direct labor rate is RM5.00 per hour. Production also require 2 machine hours per unit.

Manufacturing Overheads Cost are estimated and allocated as follows:

Variable Overheads	Total Estimate Cost (RM)	Allocation Basis
Cleaning	18,000.00	Direct Labour Hours
Maintenance	12,000.00	Machine Hours
Supervision	24,000.00	Direct Labour Hours

The following fixed overheads were also estimated

Fixed Manufacturing Overheads	Total Estimated Cost (RM)
Insurance	36,000.00
Advertising	14,000.00
Depreciation	10,000.00

Administration Cost	Total Estimate Cost (RM)
Managers Salary	108,000.00
Utilities in Main Office	12,000.00

The actual results of operations are as follows.

Units	100,000
Price (RM)	12.00
Sales (RM)				1,200,000.00
Variable Costs	Quantity Used	Rate (RM)
Direct Materials	240,000	0.80	192,000.00
Direct Labour	150,000	4.50	675,000.00
Variable Overheads	Quantity Used	Rate (RM)
Cleaning	150,000.00	0.120	18,000.00
Maintenance	200,000.00	0.060	12,000.00
Supervision	150,000.00	0.320	48,000.00
Total Variable Overhead			78,000.00
Fixed Overheads
Insurance			36,000.00
Advertising			14,000.00
Depreciation			10,000.00
Total Fixed Cost			60,000.00
Total Manufacturing Cost				1,005,000.00
Administration
Managers Salary			180,000.00
Utilities			12,000.00
Total Administration Cost				192,000.00
NET OPERATING INCOME				3,000.00

Prepare a variance analysis on the Unit Sales, Sales Price, Fixed Overhead and Administration expenses

Answer rating: 100% (QA)

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