ham Bên ope ade every month The standard cost card is as follows for a unit c RM Direct materials Direct labour Variable overheads Fixed overhead Standard cost 0.5kg at RM 4/kg 2 hours at RM 2/hour 2 hours at RM 0.30/hour 2 hours at RM 3.70/hour Standard profit Standard selling price Fudgeted output for the month of January 2021 was 5,100 units. vere as follows: Production of 4,850 units were sold for RM95,600 Materials consumed in production amounted to 2,300 kgs at a tota RM9,800 Labour hours paid amounted to 8,500 hours at a cost of RM16,80C Actual hours worked amounted to 8,000 hours Variable overheads amounted to RM2,600 Fixed overheads amounted to RM42,300 Required: Calculate ALL variances and prenare and onerating ctator

ham Bên ope ade every month The standard cost card is as follows for a unit c RM Direct materials Direct labour Variable overheads Fixed overhead Standard cost 0.5kg at RM 4/kg 2 hours at RM 2/hour 2 hours at RM 0.30/hour 2 hours at RM 3.70/hour Standard profit Standard selling price Fudgeted output for the month of January 2021 was 5,100 units. vere as follows: Production of 4,850 units were sold for RM95,600 Materials consumed in production amounted to 2,300 kgs at a tota RM9,800 Labour hours paid amounted to 8,500 hours at a cost of RM16,80C Actual hours worked amounted to 8,000 hours Variable overheads amounted to RM2,600 Fixed overheads amounted to RM42,300 Required: Calculate ALL variances and prenare and onerating ctator

Name: Wham Berhad operates a standard costing system and analysis of varian
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Description: Wham Berhad operates a standard costing system and analysis of variances ismade every month The standard cost card is as follows for a unit of product:RM2.000.5kg at RM 4/kg2 hours at RM 2/hourDirect materials4.00Direct labourVariable overheads2 hou

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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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

Topic Video

Question

Wham Berhad operates a standard costing system and analysis of variances is
made every month The standard cost card is as follows for a unit of product:
RM
2.00
0.5kg at RM 4/kg
2 hours at RM 2/hour
Direct materials
4.00
Direct labour
Variable overheads
2 hours at RM 0.30/hour
0.60
7.40
14.00
Fixed overhead
2 hours at RM 3.70/hour
Standard cost
Standard profit
Standard selling price
6.00
20.00
Budgeted output for the month of January 2021 was 5,100 units. Actual results
were as follows:
Production of 4,850 units were sold for RM95,600
Materials consumed in production amounted to 2,300 kgs at a total cost of
RM9.800
Labour hours paid amounted to 8,500 hours at a cost of RM16,800
Actual hours worked amounted to 8,000 hours
Variable overheads amounted to RM2,600
Fixed overheads amounted to RM42,300
I
Required:
a.
Calculate ALL variances and prepare and operating statement for the month
ending 31 January 2021.
b.
Critically evaluate the importance of setting standards in management
accounting.

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