Moorcroft Ltd manufactures one product. The production budget for June 2016 shows the following costs per unit:
|
£ |
|
|
Materials (£8 per kg) |
4 |
|
Labour (£10 per hour) |
15/19 |
Budgeted sales for the month were 5,000 units at £100 each. In July 2016, the management accountants compared the actual performance for the previous month and produced the following information based on actual sales of 5,000 at £80.
|
£ |
|
|
Materials (3,600 kg) |
27,000 |
|
Labour (10,000 hours) |
95,000 |
|
Budgeted £ |
Profit £ |
Actual £ |
profit £ |
|
|
Revenue for June |
|
500,000 |
|
400,000 |
|
Materials expenditure |
20,000 |
27,000 |
||
|
Labour expenditure |
75,000 |
95,000 |
95,000 |
122,000 |
|
Profit for June |
|
405,000 |
|
278,000 |