Flint Palatignium Ltd calculates the prices of its output by adding a mark-up of 15 per cent

Question:

Flint Palatignium Ltd calculates the prices of its output by adding a mark-up of 15 per cent to standard costs. These standard costs are arrived at by reference to budgeted outputs and estimated direct costs as follows:

image text in transcribed

Management accounts for April, 2008 provide an analysis of operations as follows:

image text in transcribed

Materials in stock are valued at standard cost. At 1 April, 1,000 units of material were held, whereas at 30 April the stock of this material increased to 1,750 units.

Required:
(i) A trading account for the month of April 2008 comparing the budgeted income and expenditure appropriate to actual output, to actual income and expenditure.

(ii) An explanation of the value of standard costing and variance analysis to a service business whose custom is to negotiate fixed price contracts.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Business Accounting Uk Gaap Volume 2

ISBN: 9780273718802

1st Edition

Authors: Alan Sangster, Frank Wood

Question Posted: