Ondunga Ball (Pty) Ltd currently makes use of a direct costing ,Calculate the sales volume contribution variance per tennis ball for Antelope in June 2020.
Ondunga Ball (Pty) Ltd currently makes use of a direct costing system. The company manufactures and sells two types of tennis balls, Donkey and Antelope. Total budgeted fixed manufacturing overhead costs for June 2020 amounted to N$21 000 using machine hours as a basis (traditional approach). Donkey Antelope *Budgeted production volume (tennis balls) 860 1 040 *The actual production volume for June 2020 was in line with the budgeted production figures. STANDARD REQUIREMENTS The standard requirement per tennis ball are as follows: Donkey Antelope Direct material: Rubber (grams) 49 50 Direct material: Fabric cover (grams) 9 6 Direct labour (minutes) 18 15 Overall machine time (minutes) 30 30 BUDGETED DATA FOR JUNE 2020 Deuce Ace Sales volume (number of balls) 800 1 000 Selling price per ball (N$) 40 35 Direct raw material: Rubber (per gram) 16c 16c Direct raw material: Fabric cover (per gram) 8c 8c Direct labour recovery rate (per direct labour) N$20 N$20 Variable overhead recovery rate (per direct labour) N$2 N$2 ACTUAL DATA FOR JUNE 2020 Donkey Antelope Sales volume (number of units) 860 1 040 Actual sales N$33 540 N$39 520 Purchased and used direct raw material: Rubber – 90 kg for N$13 500 Purchased and used direct raw material: Fabric cover – 10.8kg for N$7 020 Direct labour rate: N$18 per direct labour hour Variable overhead rate: N$1.80 per direct labour hour Total fixed manufacturing overheads N$25 000 JULY 2020 BUDGET The production manager has the following information available for July 2020: The budgeted units to be produced for July 2020 is 930 Donkey tennis balls and 1 260 Antelope tennis balls respectively. The required minutes per product in terms of direct labour will remain the same as in June 2020. The contribution per Donkey tennis ball will be N$30.36 and the contribution per Antelope tennis ball will be N$27.62. Required: Calculate the sales volume contribution variance per tennis ball for Antelope in June 2020.
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