Namibia Wood Products ("NWP") is a company that manufacturers different types of furniture products under a job costing environment. To ensure that the company meets its customer expectations and the same time achieve operational efficiency, the company employs a standard costing system. At the end of each period, variances are calculated and investigations are undertaken to identify areas of improvement. The following information relates to the traditional wooden work bench that NWP produces and supplies to Small to Medium workshops in Namibia.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Namibia Wood Products ("NWP") is a company that manufacturers different types of furniture
products under a job costing environment. To ensure that the company meets its customer
expectations and the same time achieve operational efficiency, the company employs a
standard costing system. At the end of each period, variances are calculated and
investigations are undertaken to identify areas of improvement.
The following information relates to the traditional wooden work bench that NWP produces
and supplies to Small to Medium workshops in Namibia.
Variance calculated:
Variances
Material price variance
Material usage
Labour rate
Labour efficiency
Month: November 2022
N$
3.1
25 000
Actual data for the month of November 2022 was as follows:
Month: November 2022
N$
Material costs
Labour costs
Production volume
3.2
16 500
40 000
22 000
850 000
600 000
Unfavourable
Favourable
Favourable
Unfavourable
The actual and standard production volume for the month of November were the same.
Required:
Prepare a standard cost sheet for the wooden work bench (Hint:
calculate the budgeted unit cost of one wooden bench)
Outline one possible
for each of the labour and material
variances.
Units
100 000 kilos
80 000 hours
30 000 units
Transcribed Image Text:Namibia Wood Products ("NWP") is a company that manufacturers different types of furniture products under a job costing environment. To ensure that the company meets its customer expectations and the same time achieve operational efficiency, the company employs a standard costing system. At the end of each period, variances are calculated and investigations are undertaken to identify areas of improvement. The following information relates to the traditional wooden work bench that NWP produces and supplies to Small to Medium workshops in Namibia. Variance calculated: Variances Material price variance Material usage Labour rate Labour efficiency Month: November 2022 N$ 3.1 25 000 Actual data for the month of November 2022 was as follows: Month: November 2022 N$ Material costs Labour costs Production volume 3.2 16 500 40 000 22 000 850 000 600 000 Unfavourable Favourable Favourable Unfavourable The actual and standard production volume for the month of November were the same. Required: Prepare a standard cost sheet for the wooden work bench (Hint: calculate the budgeted unit cost of one wooden bench) Outline one possible for each of the labour and material variances. Units 100 000 kilos 80 000 hours 30 000 units
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