WONDER (PVT) LTD COMPANY

ACCN 101
GROUP ASSIGNMENT
WONDER (PVT) LTD COMPANY

Name Surname Registration number Level

 IAN MAJAISI R207223S 1.1
 BLESSED URENGWA R213165K 1.1
 LIBERTY SHAMBARE R219181G 1.1
 MALVERN NDORO R2111190 1.1
 RUTENDO MUSHORIWA R218959H 1.1
 TINASHE NYENGERAI R215687U 1.1
 VICTOR GOPFA R219177F 1.1
 GRACIOUS CHIGWARIRA R219227A 1.1
 TASHINGA MAKORONI R219204L 1.1
 EMENITAH ZINYEKA R219175P 1.1
WONDER (PVT) LTD COMPANY

WONDER (PVT) LTD

COMPANY
a) TABLE OF CONTENTS

 Executive Summary
 Objectives

 Products

 Location

 Vision

 Mission

 Organisational structure

 Financial statements

 Income Statement

 Statement of financial position

 Statement of cash flows

 Manufacturing account
WONDER (PVT) LTD COMPANY

 Investment appraisal

 Profitability ratios

 Liquidity ratios

 Efficiency ratio

 Market related ratio

 Costs
 Variable and fixed costs
 Cost behaviour
 Overhead absorption rate

 Cost structure
 Break-even analysis

 Budgeting
 Production budgets
 Sales budgets
 Raw materials purchasing budgets
 Cash budgets
 Income statement
 Statement of financial position

 Standard costing
 Variance analysis

1. Executive summary
WONDER (PVT) LTD COMPANY

Wonder is a clothing manufacturing company to be registered under Zimbabwe’s new Companies Act of 2021 and is going to
start its operations on the 1st of July 2022. It will engage in the manufacturing of high quality clothing and targeting all customers.
There will be production of clothing designed to suit the customer preferences at an affordable price.
Initially it will produce as a private limited company. With the help of the board of advisers, Wonder will create a very successful
operation that focuses on trending and sovereignty, hence achieving its objectives.

2.1 Objectives
 Wonder aims to be the best clothing manufacturer and supplier in the market.

 The company aims to produce high quality clothing, which meets customer preferences.

 The company aims to come up with prices, which are affordable to our customers so as to increase its customer base and brand loyalty.

 It also aims to maximize revenue by double amount within 5-year period.

2.2 Products
Wonder will be manufacturing nightwear, sportswear, formal-wear and casual wear.
Wonder will look towards developing following future products
 Clothing design and style matching
 New designs and product improvement
 To adapt to technological changes to meet the new fashion and customer preferences .

2.3 Location
WONDER (PVT) LTD COMPANY

Wonder manufacturing company will be located in Harare, because it is near the market also there is a wide range of skilled labour and easy
access to raw materials from different sources.

2.4 Vision

To be the leading clothing producers both regionally and internationally by 2025

2.5 Mission

Our mission is to deliver trending high quality clothing on time at affordable prices.

2.6 Organisational structure

The company is proposed to be operating under the functional organisational structure. The Chief Executive Officer of the Wonder company
will be B Urengwa and the Board of Directors will be L Shambare,I Majaisi, G Chigwarira, R Mushoriwa and E Zinyeka. All the departments
will be reporting directly to the BOD and the BOD will be reporting to the CEO of the company. The purchasing department will be focusing
on the buying of raw material. Production department deals with the manufacturing of the clothing. Finance and accounting will be focusing
on Bookkeeping and management of the company’s financial resources.
 WONDER (PVT) LTD COMPANY

ORGANISATIONAL STRUCTURE OF WONDER (PVT) LTD COMPANY

.

CEO

BOD( board of directors)

Production
Accounting Quality Research and
Purchasing and Sales
and finance control development
distribution
WONDER (PVT) LTD COMPANY

FINANCIAL STATEMENT

WONDER INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE

2021 2022
$ $ $ $
SALES 40525 50750
LESS COST OF SALES
OPENING INVENTORY 3255
ADD PRODUCTION COST 9000 11200
9000 14455
LESS CLOSING INVENTORY 3255 5500
5745 8955
GROSS PROFIT 34780 41795
ADD OTHERS INCOMES
DISCOUNT RECEIVED 3000 4200
TOTAL INCOME 37780 45995
LESS EXPENSRES
WAGES 2300 4200
RENT 8500 1000
INSUARANCE ELECTRIC SEWING MACHINE 300 300
GENRERAL EXPENSES 1300 3000
ADVERTISING 400 600
DISCOUNT ALLOWED 400 450
BAD DEBTS 150 180
DEPRECIATION MOTOR VEHICLES 1000 1500
DEPRECIATION SEWING MACHINES 800 1200
15150 15430
NET PROFIT 22630 30565
LESS INTEREST 500 1000
WONDER (PVT) LTD COMPANY

PROFIT BEFORE TAX 22130 29565

TAX 1000 1000
PROFIT AFTER TAX 21130 28565
DIVIDENTS -PREFERENCE 4000 4000
-ORDINARY 1000 1000
5000 5000
16130 23565
WONDER (PVT) LTD COMPANY

WONDER STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE…

2021 2022

ACC ACC
COST DPN CA COST DPN CA
NON CURRRENT ASSETS $ $ $ $ $ $
FACTORY BULDING 20000 - 20000 24000 - 24000
SEWING MACHINE 6000 800 5200 10000 1200 8800
MOTOR VIHICLES 10000 1000 9000 15000 1500 13500
TOTALS 36000 1800 34200 50000 2700 46300
CURRENT ASSETS
INVENTORY-RAW MATERIALS 2500 3475
-WORK IN PROGRESS 3000 5525
-FINISHED GOODS 8525 9580
TRADE RECEIVABLES 2500 4000
PREPAYMENTS 200 1570
CASH AND EQUIVALENTS 18550 19930
CAPITAL EMPLOYED 35575 43080
EQUITY AND LIABILITIES
12000 ORDINARY SHARES OF $0.50 EACH 6000 6000
6000 PREFERENCE SHARES AT $1 EACH 6000 6000
SHARE PREMIUM 2000 2000
RETAINED EARNINGS 16130 18000
GENERAL RESERVES 5565
30130 37565
LONG TERM LIABILITIES
10% LOAN OF $5000 5000 5000
ADD CURRENT LIABILITIES
INTEREST OWING 500
TRADE PAYABLES 445 5445 15 5515
35575 43080
WONDER (PVT) LTD COMPANY

CASHFLOW STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022

$ $
OPERATING ACTIVITIES
NET PROFIT BEFORE INTEREST AND TAX 29565
(2700
add: ADJUSTMENTS FOR -DEPRECIATION )
(4555
INCREASE IN INVENTORY )
(1500
INCREASE IN TRADE RECEIVABLES )
DECREASE IN TRADE PAYABLES (430) (9185)
20380
INTEREST PAID -
(1000
TAXATIOM ) (1000)
NET CASH FLOW FROM OPERATING ACTIVITIES 19380
CASHFLOWS FROM FINANCING
ACTIVITIES(INVESTING)
(4000
EXTENSION OF FACTORY BUILDING )
(4000
PURCHASE OF SEWING MACHINE )
(5000
PURCHASE OF MOTOR VEHICLES )
(13000
NET CASH OUTFLOW FROM FINANCING ACTIVITIES )
CASHFOLW FROM INVESTING ACTIVITIES
(FINANCING)
ISSUE OF ORDINARY SHARES -
SHARE PREMIUM -
(5000
DIVIDENDS PAID )
NET CASH FLOW FROM INVESTING ACTIVITIES (5000)
INCREASE IN CASH AND CASH EQUIVALENTS 1380
CASHFOLW AS AT 1 JANUARY 2022 18550
CASHFLOW AS AT 31 DECEMBER 2022 19930
WONDER (PVT) LTD COMPANY

STATEMENT OF CHANGES IN EQUITY FOR WONDER Ltd FOR THE YEAR 2022
particulars ordinary share general retained
shares premium reserve earnings
$ $ $ $
balance b/d 6000 2000 16130
issue of ordinary shares - -
transfer to general 5565 (5565)
reserves
retained earnings for the 18000
year
balance c/d 6000 2000 5565 28565
WONDER (PVT) LTD COMPANY

Notes to the financial statements

Manufacturing account for the year ended
2021 2022
$ $ $ $

Opening stock - 8000

add purchases of raw 1000 1105
materials 0 0
add carriage inwards 600 750
1060 1180
0 0
less closing stock 8000 9800 2000
2600 10000
add direct labor 7000 9000
prime costs 9600 19000
add factory overheads
indirect materials 800 1200
indirect labor 1000 1200
factory repairs and
maintenance 1100 1500
factory rent 8500 1000
factory depreciation 800 1200
factory insurance 800 900
electricity 450 500
sewing machinery insurance 350
machinery depreciation 1000 1500
storage costs 550 15350 9000
WONDER (PVT) LTD COMPANY

24950
0 28000
add opening work in progress 3000
less closing work in progress 3000 3000 5525 (2525)
21950 25475

 Bad debts amounted to $ 150 and $180 for the year 2021 and 2022 respectively

 Interest owing will be $500 for 2022

 Discount allowed amounted to $400 and $450 for the year 2021 and 2022 respectively

 Depreciation on sewing machines was charged at 12% per annum using straight-line method

 Motor vehicles is to be depreciated at 10% per annum using straight-line method

 In the year 2022 there will be an extension of factory building costing $4000

 Additional sewing machines bought at $4000

 Acquisition of motor vehicles at $5000

 In the year 2022 retained earnings of $5565 was transferred to th general reserves

 Declared dividends for the year 2021 was 4000 ordinary shares and 1000 preference shares and the same for 2022
WONDER (PVT) LTD COMPANY

WONDER (PVT) LTD RATIOS ANALYSIS

4.1 Profitability ratios

Return on capital employed= ( Profit before interest/ Capital employed )x100
For 2021 For 2022
(22 630/35 575)x100= 63.61% (30 565/43 080)x100= 70.95%

Gross Profit Margin = (Gross Profit/Sales) × 100

For 2021 For 2022

(34 780/40 525)x100 = 85.82% (41 795/50 750)x100= 82.35%

Net profit Margin = ( Net Profit/Sales ) × 100

WONDER (PVT) LTD COMPANY

For 2021 For 2022

(22 630/40 525)x100= 55.84% (30 565/50 750)x100= 60.22%
Return on equity=( Profit before tax, after preference dividends/ ordinary share capital +Reserves)x100

For 2021 For 2022

[( 22 130-4 000)/(6 000+2 000+16 130)]x 100 [(29 565-4 000)/(6000+2000+18000+5565)]x100
=75.13% = 80.99%

4.2MARKET RELATED RATIOS

Earnings per share= (net profit after interest, tax and preference dividend)/number of ordinary shares
FOR 2021 FOR 2022

17120/12000=$1.43 PER SHARE 24565/12000= $2.05 PER SHARE

WONDER (PVT) LTD COMPANY

DIVIDEND COVER=NET PROFIT AFTER TAX AND PREFERENCE DIVIDEND/ORDINARY DIVIDENDS PAID AND
PROPOSED

2021 2022
17130/1000=17 TIMES 24565/1000=24 TIMES
WONDER (PVT) LTD COMPANY

IDENTIFICATION AND CLASSIFICATION OF COSTS

Fixed costs
 Rent

 Factory depreciation

 Machinery depreciation

 Machinery insurance

Variable costs
 Direct materials

 Direct labour

 Indirect materials

 Factory repairs and maintenance

 Factory insurance

 Store keeping cost

ANALYSING COST BEHAVIOUR

WONDER (PVT) LTD COMPANY

FIXED COSTS
Fixed cost are costs that do not vary with output and using our manufacturing account the above-mentioned fixed costs
remained constant with the exception of rent, which increased with a very significant proportion than the increase in the
production.
VARIABLE COSTS
These are costs that vary as output increases and the above-mentioned variable costs are the ones we computed from our
manufacturing account. The variable costs are increasing as the production increases

BASIS OF APPORTIONMENT
CANTEE
CUTTING ASSEMBLY STORES N
DIRECT LABOUR HOURS 3400 4 000
MACHINE HOURS 3700 3 600
NUMBER OF EMPLOYEES 8 4 3 2
FLOOR AREA 200 150 100 50
COST OF FACTORY 8000 6 000 4 000 2 000
COST OF MACHINERY 3000 2 000
NUMBER OF STORES REQUIRED 5 20 15 5
REPLACEMENT VALUE OF 1500 800 200 200
MATERIAL
 WONDER (PVT) LTD COMPANY

OVERHEAD ANALYSIS SHEET

COST TOTA BASIS CUTTING ASSEMBL STORES CANTEEN
L Y

$ $ $ $ $

DIRECT 10000 ALLOCATED 6200 3800

MATERIALS
DIRECT LABOUR 7000 ALLOCATED 4500 1500 1000

INDIRECT 1000 ALLOCATED 440 245 190 125

LABOUR
INDIRECT 800 ALLOCATED 400 270 130
MATERIALS
FACTORY RENT 8500 FLOOR 3400 2550 1700 850
AREA
FACTORY 1100 FLOOR 440 330 220 110
REPAIRS AND AREA
MAINTENANCE
FACTORY 800 COST 320 240 160 80
DEPRECIATION
FACTORY 800 FLOOR 320 240 160 80
INSURENCE AREA
ELECTRICITY 450 FLOOR 320 240 160 45
AREA
MACHINERY 1000 COST 600 400
DEPRECIATION
MACHINERY 350 REPLACEME 175 93 58 23
INSURANCE NT VALUE
STORAGE 550 FLOOR 220 165 110 55
COSTS AREA
17335 10073 3888 1368

2nd RE- NUMBER OF 648 2592 (3888) 648

APPORTIONMEN STORES
T-STRORES REQUASITIO
 WONDER (PVT) LTD COMPANY

N
17983 12665 2016

3rd RE- NUMBER OF 1344 672 (2016)

APPORTIONMEN EMPLOYEES
T – CANTEEN
19327 13337

Breakeven analysis

VARIABLE COSTS AND UNITS PRODUCED

JEAN LONG SLEAVED

TROUSERS DRESSES JEAN SKIRTS SHIRTS

PER UNIT 200 PER UNIT 100 PER UNIT 400 PER UNIT 40

DIRECT MATERIALS 20 4000 10 1000 10 4000 25 1000

DIRECT LABOUR 10 2000 20 2000 5 2000 25 1000

PRIME COST 30 6000 10 1000 2.5 1000 15 600

COST PER UNIT PER EACH PRODUCT

JEAN LONG S
PARTICULARS JEAN TROUSERS DRESSES SKIRTS SHIRTS
selling price per unit 70 75 30 140
WONDER (PVT) LTD COMPANY

number of units 200 100 400 40

variable cost per unit 30 30 15 50
fixed costs per each product 2862.5 2862.5 2862.5 2862.5

SENSETIVITY OF CONTRIBUTION TO CHANGES IN THE SALE VOLUME

VOLUME decrease
JEAN TROSERS BASE LEVEL SELLING PRICE by FIXED COSTS
decrease by
increased by 10% 10% 30%&
VARIABLE COSTS
increase by 10%
selling price 70 77 70 70
variable cost 30 30 30 33
units 200 200 180 200
$ $ $
fixed costs 2862.5 $ 2862.5 2862.5 2003.75

$ $ $
sales 14000.00 $ 15400 12600.00 14000.00
$ (2 $ $ $
variable costs 6000.00) (6000.00) (5400.00) (6600.00)
contribution $ 8000 $ 9400 $ 7200 $ 7400
$ $ $
fixed costs (2862.5) (2862.5) $ (2862.5) (2003.75)
net profit $ 5137.5 $ 6537.5 $ 4337.5 5396.25
$ $
$1 change in net profit from base level $ 1400 (5,600.00) (878.58)

DRESSES
WONDER (PVT) LTD COMPANY

75
selling price 75 82.5 $ 75
variable cost 30 30 30 33
fixed costs 2862.5 2862.5 2862.5 2003.75
units 100 100 90 100

sales $ 7500 8250 6750 7500

$ $ $ $
variable costs (3000.00) (3000.00) (2700.00) (3300.00)
contribution 4500 5250 4050 4200
$ $ $ $
fixed costs (2862.50) (2862.5) (2862.50) (2003.75)
net profit $ 1637.5 2384.5 1187.5 2196.25
$
$ change in net profit $ 747.00 $ (1444) (678.75)
% change in net profit 45.62% -12.37% -4.31%

SKIRTS
sellin price 30 33 30 30
variable cost 15 15 15 16.5
fixed costs 2862.5 2862.5 2862.5 2003.75
units 400 400 360 400

sales 12000 13200 10800 12000

$
variable costs $ (6000) $ (6000) $ (5400) (6600.00)
$
contribution 6000.00 7200 5400 5400
$ $ $
fixed costs (2862.50) (2862.50) $ (2862.5) (2003.75)
net profit $ 4337.5 8502.5 3396.25
WONDER (PVT) LTD COMPANY

3137.5
$ $ $
$1 change in net profit from base level 2,400.00 (1,360.00) 81.25
% change in net profit from base level 24.33% -13.79% 0.82%

LONG SLEAVED SHIRTS

selling price 140 154 140 140
variable costs 50 50 50 55
fixed costs 2862.5 2862.5 2862.5 2003.75
units 40 40 36 40

sales 5600 6160 5040 5600

$ $ $
variable costs $ (2000) (2000.00) (1800.00) (2200)
contribution 3600 4160 3240 5060
$ $ $
fixed costs (2862.50) (2862.50) (2862.5) $ (2003.75 )
net profit 737.5 1297.5 377.5 3056.25
$ $
$ change in net profit from base level $ 560 (560.00) 1,581.25
% change in net profit in base level 79.93% -30.07% 31.21%

PRODUCT RANKING
1. JEAN TROUSERS

2. JEAN SKIRTS

3. LONG SLEAVED SHIRTS

4. DRESSES
WONDER (PVT) LTD COMPANY
WONDER (PVT) LTD COMPANY

WONDER BIG DEAL BUDGETARY CONTROL & PREPARATION

SALES BUDBET FOR THE YEAR ENDED 30 JUNE 2022

LONG SLEAVED
2022 JEAN TROUSERS DRESSES JEAN SKIRTS SHIRTS
QUAR P P P P
TELY Vol ri Am Vol ri Am Vol ri Am Vol ri Am TO
MON um c ou um c ou um c ou um c ou TA
THS e e nt e e nt e e nt e e nt L
UNI UNI UNI UNI
TS $ $ TS $ $ TS $ $ TS $ $ $
JULY
-
SEPT
EMBE 10 602
R 32 0 3200 18 50 900 74 15 1110 18 45 810 0
OCTO
BERL
-
DECE
MBE 10 10 151
R 74 0 7400 46 0 4600 100 15 1500 36 47 1692 92
JANU
ARY-
MAR 12 1200 16 1792 395
CH 100 0 0 112 0 0 336 18 6048 72 50 3600 68
APRI
L- 13 1560 16 1320 357
JUNE 120 0 0 80 5 0 252 19 4788 40 55 2200 88
WONDER (PVT) LTD COMPANY

TOTA 2740 3662 1346 965

L 326 0 256 0 762 6 166 8302 68

RAW MATERIALS PURCHASING BUDGET FOR THE YEAR END 30 JUNE 2022

JEAN TROUSERS DRESSES JEAN SKIRTS LONG SLEAVED SHIRTS

JAN
OCT JAN- APR OCT - APR OCT JAN- APR OCT JAN- APR
JUL- - MA - JUL- - MA - JUL- - MA - JUL- - MA -
SEPT DEC R JUN SEPT DEC R JUN SEPT DEC R JUN SEPT DEC R JUN

KILOS
OPENING
STOCK 80 120 192 65 65 157 55 80 89 60 70 71
168 352 264 184 138
ISSUES 840 0 8 6 420 840 8 6 126 252 571 428 90 180 389 303
CLOSING
STOCK 80 120 192 246 65 65 157 221 55 80 89 111 60 70 71 88
172 360 270 194 145
PURCHASES 920 0 0 0 485 840 0 0 181 277 580 450 150 190 390 320

PRICE $1 $1 $1 $1 $1 $1 $1 $1 $1 $1 $1 $1 $1 $1 $1 $1
COST OF 172 360 270 194 145
MATERIALS 920 0 0 0 485 840 0 0 181 277 580 450 150 190 390 320
WONDER (PVT) LTD COMPANY

CASH BUDGET FOR THE YEAR ENDED 31 DECEMBER 2022

JEAN TROUSERS DRESSES SKIRTS LONG SLEAVED SHIRTS

JUL- OCT- JAN- APR- JUL- OCT- JAN- APR- JUL- OCT- JAN- APR- JUL- OCT- JAN- APR-
SEPT DEC MAR JUN SEPT DEC MAR JUN SEPT DEC MAR JUN SEPT DEC MAR JUN

RECEIPTS $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

CASH SALES 336 672 1411 1058 168 336 73 554 504 100 228 171 36 72 155 120
RECEIPTS FROM
DEBTORS 504 1008 2444 252 50 1108 75 151 342 54 108 233

LOAN 2000

2336 1176 2419 3502 168 588 124 1663 504 175 379 513 36 126 263 354

PAYMENTS
CREDIT0RS FOR
SUPPLIERS 368 688 1440 194 336 776 72 111 232 60 76 156

WAGES 50 50 50 50 40 40 40 40 200 20 20 20 30 30 30 30

RENT 408 306 204 102

OTHER EXPENSES 60 60 60 60 50 50 50 50 300 30 30 30 40 40 40 40

110 478 798 1958 90 284 426 1172 500 122 161 486 70 130 146 328
NET RECEIPTS OR
PAYMENTS 2226 698 1621 1544 78 304 817 491 4 53 218 27 -34 -4 90 26
WONDER (PVT) LTD COMPANY

BUDGETED INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2022

$ $ $
Sales(48545+48545) 97090
less cost of sales
opening inventory 10350
Add PURCHASES 50800
61150
LESS CLOSING INVENTORY 12350
48800
GROSS PROFIT 48290
ADD OTHER INCOMES
DISCOUNT RECEIVED 9210
TOTAL INCOME 57500
LESS EXPENSES
WAGES 7600
RENT 1020
INSUARANCE MOTOR VEHICLE 1500
DEPRICIATION 1270
GENERAL EXPENSES 9090
TOTAL EXPENSES 21480
NET PROFIT 36020
LESS INTREST ON LOAN 2000
PROFIT BEFORE TAX 34020
LESS TAXATION 4200
PROFIT AFTER TAX 29820
WONDER (PVT) LTD COMPANY

DIVIDENDS FOR YEAR : PREFERENCE 4000

ORDINARY 1000 5000
RETAINED EARNINGS FOR THE YEAR 24820

BUDGETED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2022

COST ACC DEPRECIATION CARRYING AMOUNT
NON CURRENT ASSETS $ $ $
FACTORY BULDINGS 30000 - 30000
SEWING MACHINES 6000 600 5400
MOTOR VEHICLES 11000 1100 9900
TOTALS 47000 1700 45300

CURRENT ASSETS
CLOSING INVENTORY 12361
TRADE RECEIVABLES 1500
PREPAYMENTS 1500
CASH AND CASH EQUIVALENTS 8159
CAPITAL EMPLOYED 68820
EQUITY AND LIABILITIES
EQUITY
ORDINARY SHARES(12000 ORDINARY SHARES AT $1) 12000
PREFERENCE SHARES(6000 PREFERENCE SHARES AT $1) 6000
SHARE PREMIUM 4000
RETAINED EARNINGS 24820
46820
WONDER (PVT) LTD COMPANY

LONG TERM LIABILITIES

10% LOAN OF $20000 20000
ADD CURRENT LIABILITIES
TRADE PAYABLES 1000
ACCRUALS 1000 22000
CAPITAL EMPLOYEED 68820

NOTES TO BUDGET

1. 50 % Of the sales are to be in cash and 50% are to be paid in the next quarter
2. Purchases are to be paid 60% on cash and 40% will be paid in the next quarter
3. Loan acquired $20000 at 10% interest per annum
4.Wagesof $7600 are to be paid
5. Rent to be paid $1020 of which $500 will be accrued
6. Amongst other expenses there were general expenses of $10590 of which
$1500 are to be prepaid, depreciation of motor vehicle costing $1100 and of
sewing machines is $600.
WONDER (PVT) LTD COMPANY

STANDARD COSTING FOR WONDER Ltd

Variances for jean trousers

SALES VARIENCES
SALES VOLUME VARIENCE = (Master Budget sales –flexed budget sales)

PARTICULARS AMOUNT

Standard budget sales were $32600

326@$100
Actual sales were 200@$70 $14000
WONDER (PVT) LTD COMPANY

Flexed budget sales = actual sales * budgeted sales

Sales volume variance = 22500-(200*100)
=22500- 20000
=$2500 A
Sales price variance= flexed budget sales- actual sales
= 97090-50750
=$4634A
Total sales variance= sales volume variance + sales price variance
= $2500A+$600A
=$8500A
Total cost variance =total cost per master budget – actual total cost
=23000-22790
=$210F
Total quantity variance=Total cost per master budget-total cost per flexed budget
= 23000-(4200/400)23000
=23000-24150
=$1150A
WONDER (PVT) LTD COMPANY

Total direct labor variance = Total direct labor per flexed budget – actual direct labor
= 4500-3472
=$1028F
Total direct material variance= direct materials per flexed budget-actual direct materials
= (75000*0.6)-75000
=$30000A
Total overhead variance = total overheads per flexed budget-actual total overheads
= (400/420)*32865-24535
= $6765F

DIRECT MATERIAL VARIANCES FOR JEAN TROUSERS

Direct material usage variance = (standard materials – actual materials) standard price
PARTICULAS AMOUNTS IN DOLLAS

Standard materials 8940kilos@$1 $8940

Actual materials 7540kilos @ $0.60 $4524

Direct material usage variance = (8940-7540)$1

WONDER (PVT) LTD COMPANY

=$1400F
Direct materials price variance = (SP-AP) AQ
= $(1-0.6)7540
= $3016F
Total direct materials variance = DMUV+DMPV
=$1400F+$3016F
=$ 4416F
DIRECT LABOUR VARIANCES FOR JEAN TROUSERS
PARTICULARS AMOUNTS IN DOLLAS

Standard cost is 2300@1.90 $4370

Actual cost is 2000@2.10 $4200

Direct labor rate variance= (SP-AP)AHRS

WONDER (PVT) LTD COMPANY

= $(1.9-2.1)2000
=$400A
Direct labor efficiency variance = (Standard hrs- Actual hrs) SR
= (2300-2000) $1.9
=$570F
Total labor variance = (DLRV+DLEV)
=400A+570F
=$170F