Original BudgetActualFlexible BudgetUnits Produced (in units)10,00012,000?Materials used (kg)400700?Material cost ($)8,000See purchases?Direct Labour (hours)35,00046,102?Direct Labour ($)385,000507,08
ADM 2341 – Summer 2020
Assignment 7 - Variances
Your assignment submission must be typed up in either Word or Excel and uploaded (one file only – Excel preferred) to the assignment drop-box before midnight Friday July 10
| Original Budget | Actual | Flexible Budget | |
| Units Produced (in units) | 10,000 | 12,000 | |
| Materials used (kg) | 400 | 700 | |
| Material cost ($) | 8,000 | See purchases | |
| Direct Labour (hours) | 35,000 | 46,102 | |
| Direct Labour ($) | 385,000 | 507,080 | |
| Variable Overhead ($) | 350,000 | 419,161 | |
| Fixed Overhead ($) | 160,000 | 161,000 |
Other Information
Overhead is Allocated on Direct Labour Hours
During the year, 800 kg of materials were purchased for $5,000
Beginning Inventory: none
Ending Inventory: 100kg
Required:
Calculate the flexible budget amounts for all items.
Calculate the following variances
Material Rate
Material Efficiency
Labour Price
Labour Efficiency
Variable Overhaed Rate
Variable Overhead Efficiency
Fixed Overhead Rate
Fixed Overhead Production Volume
Assume that the Material, Labour and Variable Overhead variances are inter-related. What is the most likely single cause of these variances. Briefly explain your answer.
