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Revision question on preparation of flexed budget and variance analysis

Door Dezigns limited manufactures high quality oak doors from reclaimed wood. The company is based in Wicklow and was founded in 1999. Previously the company experienced strong growth and made significant profits but this changed during the recent recession when the company almost went out of business. In the past two years, Door Dezigns limited has seen an increase in its business and based on the company’s prior experience, the directors are keen to ensure that costs are tightly controlled. The company operates a standard absorption costing system. The following details relating to the most recent financial period are available:

Standard cost card for one oak door: Direct materials
–         reclaimed oak: 1.75 square metres @ €22 per square metre 38.50
–         Oak dowels:16 @ €0.25 each 4.00
Direct labour : 0.75 hours @ €20 per hour 15.00
Variable production overhead: 0.75 hour @ €4.60 per direct labour hour 3.45
fixed production overhead: @ €5.10 per door    5.10
Total 66.05
The company budgeted to produce 10,000 oak doors during the period.  
  Actual results from production of 9,500 oak doors:   €
Direct materials –         reclaimed oak (17,100 square metres)   375,345
–         Oak dowels (159,600 dowels) 41,496
Direct labour (6,650 hours) 139,650
Variable overhead 29,925
fixed overhead 50,100


using the information provided above:

(a)     Prepare a cost statement showing the original budget, flexed budget and actual results. 

(b)     Calculate all variances in as much detail as the information permits. 

(c)     Outline TWO possible reasons to explain the direct labour variances that you have calculated at (b) above

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