The company Beta S.A. is a company in the electronics sector that manufactures component 101 for the using raw materials A and B. Raw material A has a fluctuating price but The purchasing department estimates that, for the following year, it may range around 4 euros Unit. Raw material B is currently being purchased at 8 euros per unit but is he believes that it may fall for the following year for market reasons. It is estimated that on average during that year it can be purchased at 7 euros per unit.

Each unit of product uses two (2) units of raw material A and one (1) of raw material B. Also uses 0.1 hours of direct product personnel. The hourly cost of the staff including all charges is, on average, 20 euros per hour.

The fixed manufacturing expenses budget of Delta S.A. is:

Amortization	€ 8,000
Indirect staff	€ 5,000
Management expenses	€ 2,000
Research and development	€ 3,000
Total	€ 18,000

* The production capacity under normal conditions is 1,500 units.

* Variable manufacturing overhead is € 1 per unit.

1. Calculate the manufacturing cost budget for component 101 for Beta and the standard cost.
2. Deviations Analysis if:

*In reality 1,400 units are manufactured instead out of 1,500.

*2,900 units of raw material A purchased at € 4.25 / unit are consumed and 1,500 units of raw material B purchased at € 6.5 / unit are consumed.

* 145 direct staff hours are used paid at € 19 per hour

* Variable overhead they amount to € 1,445 and fixed overheads amount to € 18,100

Answer rating: 100% (QA)

Solution Solution Standard Deviations A B C D E A B Direct material a ba1500 ca1400 A 4... View the full answer