The company "Dette blir moro" uses the standard cost principle for financial management purposes. The company produces the product Alfa, and the standard calculation is as follows:

Sale price	4 800 kr
Direct materials per unit	10 kg
Price per kilo	120 kr
Direct materials	1 200 kr
Time to produce a unit	10 Hours
Direct wages per hour	150 kr
Direct salary	1 500 kr
Contribution margin	2 100

Budgeted sales per quarter: 5,000 units
Budgeted indirect fixed costs per quarter: NOK 9,000,000
Sales 4th quarter: 4,500 units
Number of kg used in the 4th quarter: 47,250 kg
Number of hours worked in the 4th quarter: 47,250 hours

 

The company closes its accounts every quarter, and for the 4th quarter the following report is available:

	Budget	Actual	deviation
Sale income	24 000 000	22 000500	- 1999 500
Direct material	6 000 000	5 39000	708 000
Direct salary	7500 000	7 182 000	318 000
Total variable costs	13500 000	12 474000	1 026 000
Coverage contribution	10500 000	9 526 500	- 973 500
Indirect fixed costs	9 000 000	9500 000	- 500 000
Result	1 500 000	26 500	- 1 473 500

Question: Set up a detailed analysis where you show what the difference in results is due to.

 

Actual selling price
Actual material price
Actual material consumption in kg per unit
Actual wage rate:
Actual hourly consumption per unit
Standard material consumption
Standard hourly consumption

Selling price deviation
Sales Volume Variance
Material Price discrepancy
Quantity deviation
Wage rate deviation
Time deviation
Consumption variance fixed costs
Total deviation

Answer rating: 100% (QA)

Lets calculate each component of the variance using the given data Actual Selling Price 22000500 kr ... View the full answer