A consulting firm produces a service that requires the use

Assignment Help Managerial Accounting

Reference no: EM13376955

A consulting firm produces a service that requires the use of labor and materials. Each unit of service requires a standard labor time of 30 minutes (0.5 hours). The average pay rate for a labor hour is £20. The consulting firm considers all materials that are required for the service as variable overheads (OH), the cost of which is directly associated with the labor hours worked. It has been estimated that variable OH rate is £10 per service hour.

The budgeted and actual costs, revenue and units for the month November are given in the table below:
Original Budget Actual
Units of Service 1,500 1,600
Sales Revenue £120,000 £124,400
Labor hours 750 860
Labor cost £15,000 £20,210
Variable OH costs £7,500 £8,170
Fixed Cost £68,000 £68,000
Total Cost £90,500 £96,380
Operating Profit £29,500 £28,020

1. Calculate the flexed budget and the key variances between budgeted and actual results.

2. Reconcile the original budget and present the relationship between the budgeted and the actual profit for the month November

3. Discuss the calculated variances, and provide suggestions for better cost management.

Reference no: EM13376955

Questions Cloud

Sola systemssola systems a company focussed on clean energy : sola systemssola systems a company focussed on clean energy products assembles and sells two types of solar panels

Just 4 kidsbill travis owns two just 4 kids stores in : just 4 kidsbill travis owns two just 4 kids stores in florence south carolina.nbsp he believes that the stores have

Coffee makers incorporated cmitwo divisions of a cmi are : coffee makers incorporated cmi.two divisions of a cmi are involved in a dispute.nbsp division a purchases part 101 and

Choose an item that you would like to manufacture you do : choose an item that you would like to manufacture. you do not actually need to manufacture something but will proceed

A consulting firm produces a service that requires the use : a consulting firm produces a service that requires the use of labor and materials. each unit of service requires a

Hasselback inc produced 175000 units and prepared the : hasselback inc. produced 175000 units and prepared the following income report using absorption costing numbers in

Budgeting is an important internal activity preparing : budgeting is an important internal activity. preparing budgets involves forecasting sales and estimating costs. for

Tonya larsen is being investigated by law enforcement and : tonya larsen is being investigated by law enforcement and southern appalachian insurance company.just before closing on

Budgeting is an important internal activity preparing : budgeting is an important internal activity. preparing budgets involves forecasting sales and estimating costs. for

User Account

All Pages