solve a, b and canswer c part as briefly as possible Question 2:The Carat Plc a medium sized company, produces a single product in its one overseas factory. For controlpurposes, a standard costing system was recently introduced and is now in operation.The standards set for the month of May were as follows:Production and sales16,000 unitsSelling price (per unit)£140Materials6 kilo per unit at £12.25 per kiloMaterial 007Material XL903 kilo per unit at £3.20 per kiloLabour4.5 hours per unit at £8.40 per hourOverheads (all fixed)£86,400 per month. They are not absorbed into the product costs.The actual data for the month of May, is as follows.Produced 15,400 units which were sold at £138.25 each.MaterialsUsed 98,560 kilos of material 007 at the total cost of £1,256,840 and used 42,350 kilos of materials XL90 atthe total cost of £132,979. LabourPaid an actual rate of £8.65 per hour to the labour force. The total amount paid out, amounted to £012,768.Overheads (all fixed)£96,840Required:(a) Prepare a standard costing profit statement, and a profit statement based on actual figures for themonth of May.(b) Prepare a statement of the variances which reconciles the actual with the standard profit or lossfigure. (Mix and yield variances are not required).(c) Briefly explain the possible reasons for inter-relationships between material variances and labourvariances.

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(a) Prepare a standard costing profit statement, and a profit statement based on actual figures for the month of May. (b) Prepare a statement of the variances which reconciles the actual with the standard profit or loss figure. (Mix and yield variances are not required). (c) Briefly explain the possible reasons for inter-relationships between material variances and labour variances.

(a) Prepare a standard costing profit statement, and a profit statement based on actual figures for the month of May. (b) Prepare a statement of the variances which reconciles the actual with the standard profit or loss figure. (Mix and yield variances are not required). (c) Briefly explain the possible reasons for inter-relationships between material variances and labour variances.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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