Reference no: EM13839122 , Length: 1200 Words
Week 5 Individual Case Study
Assignment 2
Budgets and variances Print Page For this assignment, you will provide possible explanations for the variances that you have calculated and suggestions as to how the company might try to improve its cost control. Orchid Ltd. is a small furniture manufacturer. It was established as a family-owned business 30 years ago and prides itself on high-quality products. Most of its products are made to order as a result of direct orders from Internet-based sales. Typically the company has been profitable, operating at the top end of the market; recently, however, costs appear to have been increasing and the company has also seen a decline in its sales. The workforce is highly skilled and recently several of the experienced craftspeople who make the products have retired, and the company has had problems recruiting, training and retaining suitably skilled employees. One of its products, a table, has the following standard costs: £ Direct materials (8m @ £30/m) 240.00 Direct labour (10 hours @ £25/hr) 250.00 Fixed overheads 160.00 650.00 Selling price 950.00 Standard profit margin 300.00 The table is made from solid oak and the above materials reflect the size of the table in square metres. The labour required to make the table is highly skilled.
The monthly production and sales are planned to be 800 units. The actual results for March were as follows: £ Sales revenue 753,300 Less Direct materials (192,500) (7,000m) Direct labour (221,000) (8500 hours) Fixed overheads (130,000) Operating profit 209,800 There were no opening or closing stocks. The company manufactured and sold 810 tables; this is more than budgeted due to a successful marketing campaign. Required Parts 1 and 2 should be submitted as an operating statement, as per your Key Concept Overview, and within the Business Report as required for part 3.
A. Calculate the flexed and actual budget.
B. Calculate the following variances: o Sales variances; volume and price o Direct material variances; usage and price o Direct labour variances; efficiency and rate o Fixed overhead variance; spending
C. Present the above information as a part of a Business Report, providing possible explanations for the variances that you have calculated and suggestions as to how the company might try to improve its cost control. This assignment should be around 1,000 words for the main body of your Business Report. To complete the assignment:
• Be sure to read over your Individual Assignment before submitting it to your Instructor. Make sure the spelling and grammar are correct and the language, citing and referencing you use when providing your opinion are appropriate for academic writing.
Current and non-current liabilities is important
: Clarifying which liabilities are current, and which are not, is important for several reasons. Discuss, in your own words, why the distinction between current and non-current liabilities is important.
|
What would be the effective annual percentage cost of funds
: Affleck Inc.'s business is booming, and it needs to raise more capital. The company purchases supplies on terms of 1/10 net 20, and it currently takes the discount. One way of getting the needed funds would be to forgo the discount, and the firm's ow..
|
Cultural differences in the expression of emotion
: Create an 8- to 10- slide Microsoft PowerPoint, research-based presentation to help employees understand cultural differences in the expression of emotion and the interpretation of behaviors and traditions
|
Explain the likely pathophysiology of toms chest pain
: Explain the likely pathophysiology of Tom's chest pain and the swelling to his feet and ankles. What diagnostic procedures could confirm his condition?
|
Orchid ltd. is a small furniture manufacture
: Week 5 Individual Case Study Assignment 2 Budgets and variances Print Page For this assignment, you will provide possible explanations for the variances that you have calculated and suggestions as to how the company might try to improve its cost cont..
|
How many employees would be hired to absorb
: If an employee works six hours per day (excluding breaks, meals, and so on) per five-day week, how many employees would be hired to absorb the extra workload?
|
Concept exercise budgeting and financing the organisation
: Week 5 Key Concept Exercise Budgeting and financing the organisation Print Page This week's Key Concept Exercise is intended to get you thinking about the use of budgeting in an organisation. There are many different types of budgets. This week, you ..
|
Evaluate the firms decision making procedures
: Evaluate the firm's decision-making procedures, and explain why the acceptance of project 263 and rejection of project 264 may not be in the owners' best interest. If the firm maintains a capital structure containing 40% debt and 60% equity, find it..
|
Dealing with fuzziness in cost-volume-profit
: How might CVP help to reduce uncertainty? What other techniques might be used, perhaps in conjunction with CVP to help deal with uncertainty. Reference: Chan, Y.L. & Yuan, Y. (1990) ‘Dealing with fuzziness in cost-volume-profit analysis’, Accounting ..
|