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FINANCIAL ACCOUNTING
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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Labour Paid an actual rate of £8.65 per hour to the labour force. The total amount paid out, amounted to £012,768. Overheads (all fixed) £96,840 Required: (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.
Transcribed Image Text:Labour Paid an actual rate of £8.65 per hour to the labour force. The total amount paid out, amounted to £012,768. Overheads (all fixed) £96,840 Required: (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.
Question 2: The Carat Plc a medium sized company, produces a single product in its one overseas factory. For control purposes, 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 sales 16,000 units Selling price (per unit) £140 Materials 6 kilo per unit at £12.25 per kilo Material 007 Material XL90 3 kilo per unit at £3.20 per kilo Labour 4.5 hours per unit at £8.40 per hour Overheads (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. Materials Used 98,560 kilos of material 007 at the total cost of £1,256,840 and used 42,350 kilos of materials XL90 at the total cost of £132,979.
Transcribed Image Text:Question 2: The Carat Plc a medium sized company, produces a single product in its one overseas factory. For control purposes, 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 sales 16,000 units Selling price (per unit) £140 Materials 6 kilo per unit at £12.25 per kilo Material 007 Material XL90 3 kilo per unit at £3.20 per kilo Labour 4.5 hours per unit at £8.40 per hour Overheads (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. Materials Used 98,560 kilos of material 007 at the total cost of £1,256,840 and used 42,350 kilos of materials XL90 at the total cost of £132,979.
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