Accounting for Managers: Interpreting accounting information for decision-making

SOLUTIONS TO QUESTIONS 441

Table A2.31

Budget Flexible budget Actual

Sales units 10,000 11,000 11,000
Price per unit £37. 10 £37. 10 £36
Sales revenue 371,000 408,100 396,000
Direct materials
Magna – per unit 60,000 11 , 000 × 4 = 44 , 000 67,425

• total @ £1. 50 = 66 , 000
  Carta – per unit 50,000 11 , 000 × 1 = 11 , 000 58,650


• total @ £5= 55 , 000
  Labour – per unit 175,000 11 , 000 × 2. 5 = 27 , 500 187,440


• total @ £7= 192 , 500

Total direct costs 285,000 313,500 313,515

Contribution margin 86,000 94,600 82,485
Fixed costs 75,000 75,000 68,000

Profit 11,000 19,600 14,485

Table A2.32

Actual quantity×

actual price

Actual quantity×

standard price

Standard quantity×

standard price

Sales 396 408.1 371

Price 12.1 A Quantity 37.1 F

Magna 67,425 66,000 60,000

Price 1,425 A Usage 6,000 A

Carta 58,650 55,000 50,000

Price 3650 A Usage 5,000 A

Labour 187,440 192,500 175,000

Price 5060 F Usage 17,500 A

Fixed costs 75,000 75,000 68,000

Variance 7,000 F