Performance Management: Variance Calculation, Performance of Company, Just in Time Manufacturing System

PERFORMANCE
MANAGEMENT

Table of Contents
SECTION A.....................................................................................................................................4
Question 1...................................................................................................................................4
Variance calculation....................................................................................................................4
B)Performance of company........................................................................................................5
c) Just in time manufacturing system..........................................................................................6
Question 2...................................................................................................................................6
SECTION B.....................................................................................................................................8
Question 3...................................................................................................................................8
Question 5...................................................................................................................................9
REFERENCES..............................................................................................................................12

SECTION A
Question 1
Variance calculation
Direct material mix variance:
(AQSM – AQAM) * SP
Sand:
(434000 – 455700) * .03
= -651
Cement:
(155000 – 147250) * .26
= 2015
Solodifer:
(31000 – 34100) * 1
= -3100
Direct material yield variance:
(Standard output * standard cost) – (Actual output * standard cost)
Sand”
(434000 * .03) – (455700 * .03)
= - 651
Cement:
(155000 – 147250) * .26
= 2015
Solodifer:
(31000 – 34100) * 1

= -3100
(Hence, the price remain the same which also could not change any result in respect to the
material usage variance and the material yield variance)
Direct labour mix variance
(Actual hrs used at standard mix – Actual hrs used at actual mix) * standard price
= (12 – 11.28) * 1.8
= 1.296
Direct labour yield variance
(Actual hrs used at standard mix – Actual output hrs used at standard mix) * standard price
= (5640 - 5828 ) * 1.8
= -338.4
Fixed overhead expenditure variance
Budgeted fixed overhead – Actual fixed overhead
= 30000 * .75 – 39432
= -16932
Fixed overhead volume capcity variance
Standard price * ( Budgeted hours – Actual Hours)
= .75 (30000 * 18 / 60 – 9114)
= -85.5
Fixed overhead volume efficiency variance
(Actual hours * fixed overhead rate) – (Standard hours * fixed overhead rate)
= (9114 * 2.75) – (9000 * 2.5)
= 2563.5
B)Performance of company
The performance of the business entity is found very effective as the production was
more than the expected or the standard level of activity. The role of the efficiency of the business
entity is very significant in nature that can certainly indicated and demonstrated the fact that the
factors certainly influence the business performance under the respective market. The production