Rocking Horses Limited produces luxury vintage wooden rocking horses for children. Expected production for this product...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Rocking Horses Limited produces luxury vintage wooden rocking horses for children. Expected production for this product for January is 3,000 units. Budget information for this product is as follows: 1. Direct material - each unit of production requires 20kg of raw material, which costs £5 per kg. 2. To produce one rocking horse requires ten labour hours at £10 per hour. 3. Variable production overheads are charged at the rate of £3 per unit produced. 4. Fixed production overheads for the month are budgeted at £7,000. Actual figures for the month of January were: Direct Material Cost Direct Labour Cost Direct Labour Hours Incurred Variable production Overheads Fixed Production Overheads £305,000 £290,000 Figure not provided £7,800 £7,100 The following additional information may also be relevant: a) Rocking horses feels that its supplier of materials is taking the business of Rocking Horses for granted. b) Staff have recently been on a training course to update their knowledge about using machinery Prepare an expenditure budget monitoring statement for Rocking Horses Limited for the month of January which shows the variance of budgets to actual figures and whether each variance is favourable or not favourable. Select significant variances and suggest why these may have occurred. Suggest reasonable actions Rocking Horses could take to reduce these variances in the future. Rocking Horses Limited produces luxury vintage wooden rocking horses for children. Expected production for this product for January is 3,000 units. Budget information for this product is as follows: 1. Direct material - each unit of production requires 20kg of raw material, which costs £5 per kg. 2. To produce one rocking horse requires ten labour hours at £10 per hour. 3. Variable production overheads are charged at the rate of £3 per unit produced. 4. Fixed production overheads for the month are budgeted at £7,000. Actual figures for the month of January were: Direct Material Cost Direct Labour Cost Direct Labour Hours Incurred Variable production Overheads Fixed Production Overheads £305,000 £290,000 Figure not provided £7,800 £7,100 The following additional information may also be relevant: a) Rocking horses feels that its supplier of materials is taking the business of Rocking Horses for granted. b) Staff have recently been on a training course to update their knowledge about using machinery Prepare an expenditure budget monitoring statement for Rocking Horses Limited for the month of January which shows the variance of budgets to actual figures and whether each variance is favourable or not favourable. Select significant variances and suggest why these may have occurred. Suggest reasonable actions Rocking Horses could take to reduce these variances in the future.
Expert Answer:
Answer rating: 100% (QA)
Significant variances Direct Material Cost The cost of raw materials used was significantly higher t... View the full answer
Related Book For
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu
Posted Date:
Students also viewed these accounting questions
-
Direct material cost $ 85 comma 000 per unit of RS-32 Direct manufacturing labor time for first unit 3 comma 900 direct manufacturing labor-hours Learning curve for manufacturing labor time per radar...
-
Following are budget and actual figures for selected income and expense accounts for June and cumulative variances for each account through May. (Parentheses indicate an unfavorable variance.) Answer...
-
A particular production process requires two types of raw materials to produce the end product. Each unit of finished product requires three units of raw material A and 2 units of raw material B and...
-
Ebbers Corporation overstated its ending inventory balance by $15,000 in the current year. What impact will this error have on cost of goods sold and gross profit in the current year and following...
-
At a recent board meeting of the Grayson Manufacturing Company, several individuals in attendance expressed concern that they could not understand how the choice of an activity level for determining...
-
Analyze the meaning of the Green function of problem 14.8 for the case when (r, t 0 ) is given by the Dirac delta function Data from Problem 14.8. Show that the time evolution of a wave packet (r, t)...
-
Andy applies for a custodial supervisor position with a school district in Texas. The job description states that a preferred qualification is that the candidate be fluent in both English and Spanish...
-
Swisscom AG, the principal provider of telecommunications in Switzerland, prepares consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). Until 2007,...
-
61. The solubility product of CuS, AgS and HgS are 10 37, 104 and 1054 respectively. The solubility of these sulphides will be in the order (1) HgS> AgS > Cus (2) AgS>HgS > CuS (3) CuS AgS > HgS (4)...
-
Senior Home Living (SHL) is a Canadian-based corporation located in British Columbia. SHL provides senior living residences across Canada. The company was incorporated in 1975, and has been...
-
1. Write a C++ program to assist a university administrator in determining some statistics about students. For each student, the administrator enters the student number (5 digits), gender (1 for male...
-
In some countries, fake qualifications and forged certificates are as common as the real thing. To what extent do you think that this devalues the real thing? If it is so easy to obtain convincing...
-
The use of social media for public screening of job applicants can offer benefits to an employer such as a relatively low cost recruitment alternative and a means for finding information about...
-
What can retirement benefits specialists in the United States learn from the successful experience of the Australian Superannuation retirement program? Do you think that American citizens would...
-
As a team, consider the following situation and then outline an action plan as to how you would propose to deal with it. Your company has traditionally had a young employee profile. As a retailer...
-
Pearsons Acclaim runs a system where digital badges are awarded to individuals when they enroll in a training course or project. Most achievement certificates and degrees are paper-based and not...
-
In this problem, we are going to answer the following question. Given two points (1,1) and (2,2), can we find an exponential function y = c(a), such that it passes through both of these points? If...
-
Phosgene, COCl2, is a toxic gas used in the manufacture of urethane plastics. The gas dissociates at high temperature. At 400oC, the equilibrium constant Kc is 8.05 104. Find the percentage of...
-
As the CEO of Friendly Hardware Company, you examined the following measures of the performance of three divisions (in thousands of dollars). 1. Calculate for each division the rate of return on net...
-
Cindys BBQ is a restaurant in Thunder Bay. Cindy expanded to a second location in Sudbury three years ago. Recently, Cindy decided to retire from active management of the individual restaurants but...
-
Suppose the Thunder Bay Parks Department is considering the purchase of a new, more efficient pool heater for its Moorcroft Swimming Pool at a cost of $15,000. It should save $3,000 in cash operating...
-
The common field cricket makes its characteristic loud chirping sound using a specialized vibrating structure in its wings. The motion of this structureand the sound intensity that it producescan be...
-
A child on a swing set swings back and forth with a period of 3.3 s and an amplitude of 25. What is the maximum speed of the child as she swings?
-
In a science museum, you may have seen a Foucault pendulum, which is used to demonstrate the rotation of the earth. In one museums pendulum, the 110 kg bob swings from a 15.8-m-long cable with an...
Study smarter with the SolutionInn App