Menu
support@graduatecourseshelp.com
+1(805) 568 7317

produce a short report explaining the principles upon which your re drafted statemen 597842

Preparation of an operating control statement and the calculation of labour, material and overhead variances

The following statement has been produced for presentation to the general manager of Department X.

Month ended 31 October

Original

Actual

budget

result

Variance

(£)

(£)

(£)

Sales

600000

550000

(50000)

Direct materials

150000

130000

20000

Direct labour

200000

189000

11000

Production overhead:

Variable with direct labour

50000

46000

4000

Fixed

25000

29000

(4000)

Variable selling overhead

75000

72000

3000

Fixed selling overhead

50000

46000

4000

Total costs

550000

512000

38000

Profit

50000

38000

(12000)

Direct labour hours

50000

47500

Sales and production units

5000

4500

The general manager says that this type of statement does not provide much relevant information for him. He also thought that the profit for the month would be well up to budget and was surprised to see a large adverse profit variance.

You are required to

(a) re-draft the above statement in a form which would be more relevant for the general manager;

(b) calculate all sales, material, labour and overhead variances and reconcile to the statement produced in (a);

(c) produce a short report explaining the principles upon which your re-drafted statement is based and what information it provides.

"Order a similar paper and get 15% discount on your first order with us
Use the following coupon
"GET15"

Order Now