Praneet Garments Pvt Ltd (PGL) manufactures and sells Blazers. The standard cost sheet of one blazer is given below,
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Maximum Capacity : 12,000 Blazers |
||
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Actual production and sales : 10000 Blazers |
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|
Description |
Details |
Cost |
|
Direct material |
2 sq mtr @ Rs 600/sq mtr |
1200 |
|
Direct labor |
0.8 lhrs @ Rs 400 /lhr |
320 |
|
Variable manufacturing overheads |
0.40 mchr/blazer@Rs 600/mchr |
240 |
|
Fixed overheads |
(Rs55,20,000/4800 mchr)*.40mchr |
460 |
|
Total costs |
|
2220 |
|
Standard selling price |
|
2400 |
|
Standard profit |
|
180 |
Actual units produced and sold during a period equal 10000 Blazers. There was no opening or closing inventory. The Blazers were sold @ Rs 2500/Unit. 22200 square meter of cloth was purchase at a rate of Rs 560/square meter. The labor worked for 9000 hours at an actual rate of Rs 440 per labor hour. Actual variable overheads equaled Rs 26, 10,000. 4500 machine hours were consumed during actual production. Actual fixed overheads amounted to Rs 57, 00,000.Fixed overheads are understood to be based on the machine hours.
1. Compute
a. Material usage and price variance.
b. Labor rate and efficiency variance.
c. Variable overhead efficiency and rate variance.
d. Production volume and fixed overhead expenditure variance.
e. Selling price variance.
2. Reconcile the standard profit with variances to arrive at the actual profits.
3. Journalize the transactions.
1. Praneet Garments Pvt Ltd (PGL) manufactures and sells Blazers. The standard cost sheet of one blazer is given below,
|
Maximum Capacity : 12,000 Blazers |
||
|
Actual production and sales : 10000 Blazers |
||
|
Description |
Details |
Cost |
|
Direct material |
2 sq mtr @ Rs 600/sq mtr |
1200 |
|
Direct labor |
0.8 lhrs @ Rs 400 /lhr |
320 |
|
Variable manufacturing overheads |
0.40 mchr/blazer@Rs 600/mchr |
240 |
|
Fixed overheads |
(Rs55,20,000/4800 mchr)*.40mchr |
460 |
|
Total costs |
|
2220 |
|
Standard selling price |
|
2400 |
|
Standard profit |
|
180 |
Actual units produced and sold during a period equal 10000 Blazers. There was no opening or closing inventory. The Blazers were sold @ Rs 2500/Unit. 22200 square meter of cloth was purchase at a rate of Rs 560/square meter. The labor worked for 9000 hours at an actual rate of Rs 440 per labor hour. Actual variable overheads equaled Rs 26, 10,000. 4500 machine hours were consumed during actual production. Actual fixed overheads amounted to Rs 57, 00,000.Fixed overheads are understood to be based on the machine hours.
1. Compute
a. Material usage and price variance.
b. Labor rate and efficiency variance.
c. Variable overhead efficiency and rate variance.
d. Production volume and fixed overhead expenditure variance.
e. Selling price variance.
2. Reconcile the standard profit with variances to arrive at the actual profits.
3. Journalize the transactions.