Phuong Thao Nguyen

NEU-SAA
Scenario-based question
Seri Ltd manufactures a single type of luxury bedding. The standard cost per bedding is as follows:
£
Material 3 meters @ £16/m 48
Labour 2h @ £20/h 40
Variable overheads 2h @ £8/h 16
104
The budgeted production and sales for each month are 1,500 sets selling for £210 each
Budgeted fixed overheads are £120,000 p.a which are inccured evenly throughout the year.
Actual results for December are as follows
1,450 sets were produced and sold at a price that was £5 per unit higher than the budget.
The cost of material was £66,816 and there was a favourable price variance of £7,424
Labour worked for 2,320 hours with total labour variance of £3,625 favourable
Fixed and variable overheads were £13,120 and £22,040 respectively
Complete the operating statement below for the month of December
Make one entry (adverse or favourable) for each variance and enter a zero or dash
in the other column
Enter the net total of adverse and favourable variances as either a positive number
(favourable total) or negative number (adverse total) in the final column
 Favourable Adverse
£ £ £
Budgeted contribution
Sales volume variance
Sales price variance
Variable cost variances
Material price
Material usage
Labour rate
Labour efficiency
Variable overhead rate
Variable overhead efficiency
Total variable cost variances
Budgeted fixed overhead
Fixed overhead expenditure variance
Actual profit