LULU PANTS CO. ACCT 362 Spring 2019: Standard Costing Assignment

This assignment solution focuses on standard costing principles, specifically addressing a case study for Lulu Pants Co. It begins with a flexible budget analysis, detailing sales, variable costs (direct materials, direct labor, dyeing, stamping, and embroidery), and contribution margin across different product sizes (X Large, Large, and Medium). The solution then calculates operating profit after deducting fixed costs (manufacturing overhead, selling and distribution, and administration expenses). Furthermore, the document delves into variance analysis, including sales volume, sales mix, and sales quantity variances. The analysis extends to various cost variances such as manufacturing, market share, and market size variances, providing a comprehensive understanding of cost control and performance evaluation within the context of the Lulu Pants Co. scenario.

STANDARD COSTING 1
Part 1:
Flexible
budget
Particulars Amounts in $
Units Sold 52,000.00 52,000.00 1,36,000.00
X Large Large Medium
Sales 36,40,000.00
31,20,000.0
0
74,80,000.0
0
142,40,000.0
0
Less: variable cost
Direct material 3,12,000.00 2,80,800.00 5,10,000.00 11,02,800.00
Direct labour 2,14,066.67 1,64,666.67 3,87,600.00 7,66,333.33
Dyeing 6,76,000.00 6,76,000.00
17,68,000.0
0 31,20,000.00
Stamping 2,34,000.00 2,34,000.00 6,12,000.00 10,80,000.00
Embroidery 6,24,000.00 6,24,000.00
16,32,000.0
0 28,80,000.00
Contribution 15,79,933.33
11,40,533.3
3
25,70,400.0
0 52,90,866.67
Less: fixed costs:

STANDARD COSTING 2
Manufacturing overhead 5,00,000.00
Selling and distribution
expenses 50,00,000.00
Administration expenses 40,00,000.00
Operating profit
-
42,09,133.33
Less: taxes -
Net Income
-
42,09,133.33
Task 2:
Budgeted profit
129486
7
Sales Volume variance
Priorit
y Team Shop Total
Sales Mix variance
(Actual
units
sold-
units
sales at
standard
mix)*st
andard
profit
per unit
4,99,
106.67
36,
640.00
-
1,66,61
3.33
3,69,
133.33
F 3,69,
133.33
Sales quantity variance
(Budget
ed sales
- Unit
Sales at
Standar
d
Mix)*St
andard
contribu
tion per
unit
25,31,
700.00
7,50,
933.33
-
3,64,00
0.00
29,18,
633.33
U
-
29,18,6
33.33

STANDARD COSTING 3
Market share variance
(Actual
market
share
%-
budgete
d
market
share
%)*Tot
al
market
in
units/pr
ofit
margin
per unit
-
139.32 -89.08
-
532.39
-
760.80
U -
760.80
Market size variance
(Weight
ed
average
price
average
of each
product
*(actual
market
size-
budeted
market
size)*bu
dgeted
market
share -0.14 -0.12 -0.13 -0.39
U
-0.39
Conversion costs
(Actual-
budget)
35,56,
394.00
Selling price variance
(Actual
sales
revenue
-Actual
sales
revenue
at
budgete
d price)
14,79,
700.00
-
6,15,7
00.00
-
27,83,1
00.00
-
19,19,1
00.00
U
-
19,19,1
00.00
Manufacturing Costs
(Actual-
budget)
-
39,910.
00
U
-
39,910.
00
Selling and Distributing
Expenses Variances
(Actual-
budget)
-
7,61,60
0.00
U
-
7,61,60
0.00
Other Operating (Actual- 4,15, 4,15,

STANDARD COSTING 4
expenses budget) 550.00
F
550.00
Actual profit
-
4,060.1
9