Accounting

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

A. Material Rate

B. Material Efficiency

C. Labour Price

D. Labour Efficiency

E. Variable Overhaed Rate

F. Variable Overhead Efficiency

G. Fixed Overhead Rate

H. Fixed Overhead Production Volume

I. 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.