Using the case study, Glasgowa Itd, considered and your reading and research, analyse the variances calculated...
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Using the case study, Glasgowa Itd, considered and your reading and research, analyse the variances calculated and discuss the possible reasons behind the significant variances. (225 words excluding calculations) Glasgowa Itd Glasgowa ltd makes a single product "Bravo+". It operates a standard absorption costing system. The budget for 2020 shows sales of 500,000 Bravo+ at £0.25 giving a profit of £12,500. Standard absorption cost for one unit of Bravo+: Items Details Material Direct labour Variable overheads Fixed overheads Standard cost of production 1kg plastic @£0.05/kg 15 minutes @£0.50/h Items Material Direct labour 15 minutes @£0.10/h 15 minutes @£0.10/h Cost £0.050 Actual results for 2020: Number of Bravo+ actually made = 452,000 which were sold at £0.30 each. Details 480,000 kg 100,000 hours @ £0.55/h See the following note* £0.125 £0.025 £0.025 £0.225 Cost £18,000 £55,000 Variable overheads Fixed overheads *Due to power cut, only 95,000 hours were actually worked. Independent activity: Using the case study, Glasgowa Itd, and your reading and research, analyse the variances calculated and discuss the possible reasons behind the significant variances. Ref: Proctor (2013) amended question £12,000 £12,000 Using the case study, Glasgowa Itd, considered and your reading and research, analyse the variances calculated and discuss the possible reasons behind the significant variances. (225 words excluding calculations) Glasgowa Itd Glasgowa ltd makes a single product "Bravo+". It operates a standard absorption costing system. The budget for 2020 shows sales of 500,000 Bravo+ at £0.25 giving a profit of £12,500. Standard absorption cost for one unit of Bravo+: Items Details Material Direct labour Variable overheads Fixed overheads Standard cost of production 1kg plastic @£0.05/kg 15 minutes @£0.50/h Items Material Direct labour 15 minutes @£0.10/h 15 minutes @£0.10/h Cost £0.050 Actual results for 2020: Number of Bravo+ actually made = 452,000 which were sold at £0.30 each. Details 480,000 kg 100,000 hours @ £0.55/h See the following note* £0.125 £0.025 £0.025 £0.225 Cost £18,000 £55,000 Variable overheads Fixed overheads *Due to power cut, only 95,000 hours were actually worked. Independent activity: Using the case study, Glasgowa Itd, and your reading and research, analyse the variances calculated and discuss the possible reasons behind the significant variances. Ref: Proctor (2013) amended question £12,000 £12,000
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International Management Managing Across Borders and Cultures Text and Cases
ISBN: 978-0134376042
9th edition
Authors: Helen Deresky
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