Accounting for Managers: Interpreting accounting information for decision-making

440 ACCOUNTING FOR MANAGERS

(d) Budget 11,000
Variances
Sales price 12,100 A
Sales quantity 37,100 F
Magna price 1,425 A
Magna quantity 6,000 A
Carta price 3,650 A
Carta quantity 5,000 A
Labour price 5,060 F
Labour quantity 17,500 A
Fixed costs 7,000 F

3,485 F

Actual 14,485

Table A2.30

Budget Actual

Sales units 10,000 11,000

Price per unit £37. 10 £36

Sales revenue 371,000 396,000

Direct materials

Magna – per unit 40,000 kg @ £1.50/kg 46,500 kg @ £1. 45

• total 60,000 67,425
  Carta – per unit 10,000 kg @ £5/kg 11,500 @ £5. 10


• total 50,000 58,650
  Labour – per unit 25,000 hours @ £7 26,400 hrs @ £7. 10


• total 175,000 187,440

Total direct costs 285,000 313,515

Contribution margin 86,000 82,485

Fixed costs 75,000 68,000

Profit 11,000 14,485