Uitwerking Case 5 Accounting BEC-22806

Variance analysis: C5 Group 31 - Jèske Knol, Lisan Duijvestijn en Marjolein van Laar

Problem 5.1

Budgeted production and sales: 14,000
Selling price: € 30.00
Normal production and sales: 15,000

Budgeted costs:
* Material: 7,000 kg x € 10 € 70,000.00
* Labour (variable) 1,400 hrs x € 50 € 70,000.00
* Fixed production costs € 150,000.00
* Fixed selling costs € 60,000.00
€ 350,000.00

a)
Notes:
* With an integral cost price, all manufacturing expenses, whether direct or indirect, are taken into account wh
* Absorption costing is a managerial accounting method for capturing all costs associated with manufacturing a
* Use budgeted production to calculate the variable part of the unit cost price.
* Use normal production to calculate the fixed part of the unit cost price.

Integral unit cost price using absorption costing
Variable costs:
* Material € 5.00
* Labour € 5.00
Fixed costs:
* Production € 10.00
* Selling € 4.00
Cost price: € 24.00

b)
Budgeted profit
Budgeted profit = budgeted turnover - costs
Budgeted turnover: € 420,000.00
Budgeted costs: € 350,000.00
Budgeted profit: € 70,000.00

Realization:
Produced: 14,800
Sales: 15,200
Selling price: € 32.50
Material expenses: € 73,800.00
Material prices per kg: € 10.25
Labour expenses: € 68,000.00
Number of turned machine hours: 14900.00
Fixed production costs: € 148,000.00
Fixed selling costs: € 62,000.00

c)