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    Danshui Plant

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    SabbirAhmed
    This document contains 4 sections that analyze the monthly budget and variances for a manufacturing company. Section 1 provides the revenue, costs, and contribution margin calculations for a budget of 200,000 units. Section 2 calculates the budgeted cost per unit using total budgeted costs and units. Section 3 shows the flexible budget for 180,000 units with variances from actual figures. It shows variances for various revenue and cost line items. Section 4 breaks down the variances for flash memory costs and labor costs into price and usage variances.

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    Danshui Plant

    Uploaded by

    SabbirAhmed
    365 views5 pages
    This document contains 4 sections that analyze the monthly budget and variances for a manufacturing company. Section 1 provides the revenue, costs, and contribution margin calculations for a budget of 200,000 units. Section 2 calculates the budgeted cost per unit using total budgeted costs and units. Section 3 shows the flexible budget for 180,000 units with variances from actual figures. It shows variances for various revenue and cost line items. Section 4 breaks down the variances for flash memory costs and labor costs into price and usage variances.

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    This document contains 4 sections that analyze the monthly budget and variances for a manufacturing company. Section 1 provides the revenue, costs, and contribution margin calculations for a budget of 200,000 units. Section 2 calculates the budgeted cost per unit using total budgeted costs and units. Section 3 shows the flexible budget for 180,000 units with variances from actual figures. It shows variances for various revenue and cost line items. Section 4 breaks down the variances for flash memory costs and labor costs into price and usage variances.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    365 views5 pages

    Danshui Plant

    Uploaded by

    SabbirAhmed
    This document contains 4 sections that analyze the monthly budget and variances for a manufacturing company. Section 1 provides the revenue, costs, and contribution margin calculations for a budget of 200,000 units. Section 2 calculates the budgeted cost per unit using total budgeted costs and units. Section 3 shows the flexible budget for 180,000 units with variances from actual figures. It shows variances for various revenue and cost line items. Section 4 breaks down the variances for flash memory costs and labor costs into price and usage variances.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 5

    A1)

    Monthly Budget
    Particulars ('000)
    No. of units 200
    Total Revenue $41,240
    Total Variable Cost $40,411
    Total Fixed Cost $729

    Contribution Margins Calculation

    Selling Price per unit $206.20

    Variable Cost per unit $202.06

    Contribution Margin = SP per unit $4.14


    - Variable cost per unit

    Break Even Point( No of units to break even) 175875

    A2) Budgeted cost per unit if all manufacturing overhead ( both fixed and variable) costs are allocated to planned production
    Budgeted Total Cost $41,140,000
    Expected Cost per unit = Budgeted total
    Budgeted Production Units
    cost/Budgeted No. of units 200,000
    205.7

    Actual cost per unit of production and shipping


    Actual Total Cost $38,148,000
    Actual production units 180,000
    Actual cost per unit 211.93

    A3) August 2010 Flexible Budget and Vairances


    All units are in Thousands of $
    Budgeted figures Expected figures Actual figures
    Particulars for 200,000 units for
    (Budgeted Figures for 180,000 units
    180,000 units Variance
    x 180,000/200,000)
    Revenue (Transfer from Shenzhen) $41,240 $37,116 $37,476 $360
    Variable Costs
    Materials
    Flash Memory $5,400 $4,860 $5,249 $389
    Application Processes $2,150 $1,935 $1,935 $0
    Chips-phone $2,810 $2,529 $2,529 $0
    Gyroscope $520 $468 $468 $0
    8 other chips $14,190 $12,771 $12,643 $128
    Variable supplies and tools $12,508 $11,257.20 $11,305 $47.80
    Sub-Total $37,578 $33,820.20 $34,129 $308.80
    Labour
    Assembly and Packaging $2,622 $2,359.80 $3,092 $732.20
    Shipping $212 $190.80 $191 $0.20
    Total Variable Cost $40,412 $36,370.80 $37,412 $1,041.20
    Fixed Costs
    Factory Rent $400 $400 $400 $0
    Machine Depreciation $150 $150 $150 $0
    Utility Fee and Taxes $52 $52 $52 $0
    Supervision $127 $127 $134 $7
    Total Fixed Costs $729 $729 $736 $7
    TOTAL COST $41,141 $37,099.80 $38,148 $1,048.20

    NET INCOME $99 $16.20 ($672) $688.20

    ]
    A4)

    Flash Memory Price Variance


    (Actual Price - Standard Price) * Actual Quantity = Performance
    $29-$27 * 18000 + 1000 $362,000.00 Unfavourable
    Flash Memory Usage Variance
    (Actual Quantity - Standard Quantity) * Standard Price = Performance
    181,000-180,000 * $27 $27,000.00 Unfavourable

    Total Flash Memory Variance = Flash Memory Price Variance + Flash Memory Usage Variance=
    $362,000 Unfavourable + $27,000 Unfavourable = $389,000.00 Performance Unfavourable

    Overhead Spending Variance = Performance


    Actual Fixed Overhead - Standard Fixed Overhead
    $736,000-$729,000 $7,000.00 Unfavourable

    Labour Price Variance


    Since Labour Rates have increased by 30% .
    Actual price of Labour = Standard Price *1.3
    Variance = Performance
    $713,538.46 Unfavourable

    Labour Usage Variance


    Total Labour variance - Labour Price Variance
    Variance = Performance
    $18,661.54 Unfavourable
    Adjustment
    Performance Factor
    0.9
    Favourable

    Unfavourable
    N/A
    N/A
    N/A
    Favourable
    Unfavourable
    Unfavourable

    Unfavourable
    Unfavourable
    Unfavourable

    N/A
    N/A
    N/A
    Unfavourable
    Unfavourable
    Unfavourable

    Unfavourable

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