Key variances between budgeted and actual results

Assignment Help Managerial Accounting

Reference no: EM13172157

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: EM13172157

Questions Cloud

What mass of al2o3 in grams can be made : What mass of Al2O3 in grams can be made by reaacting 4.6 g AL with excess oxygen?

To what pressure should fill the acetylene tank to ensure : to what pressure should you fill the acetylene tank to ensure that you run out of each gas at the same time? Assume ideal behavior for all gases.

State what is the mole fraction of water in solution : A solution contains 3.60 mol of water and 1.50 mol of nonvolatile glucose (C6H12O6). What is the mole fraction of water in this solution?

Define the various ways that the fischer esterification : discuss the various ways that the Fischer esterification reaction can be run to maximize conversion to ester.

Key variances between budgeted and actual results : Calculate the flexed budget and the key variances between budgeted and actual results and reconcile the original budget and present the relationship between the budgeted and the actual profit for the month November

Determine the activation energy in kj mol : Rate constant at a temperature of 37.8 Celsius is precisely three times that at 25 Celsius. Determine the activation energy in kJ/mol

Describe partial molar quantity : Define partial molar quantity and hence write an expression for a thermodynamic quantity in terms of its partial molar values. Two liquids A and B with molar masses of 18g mol-1 and 46 g mol-1, respectively are mixed to give a solution in which th..

Nickel oxide crystallizes in the nacl type of cystal : Nickel oxide crystallizes in the NaCl type of cystal structure. The length of an edge of the unit cell of NiO is 4.18A. What is the NiO bond length?

State and write the equation for the reduction reaction : Write the equation for the reduction reaction. D) If the potential of the silver, silver ion electrode, E standard sub Ag+, Ag is taken to be 0.000V in oxidation or reduction, what is the value of the potential for the oxidation reaction, E standa..

User Account

All Pages