Calculation of actual input data working back from variances The following profit reconciliation statement has been prepared
Question:
Calculation of actual input data working back from variances The following profit reconciliation statement has been prepared by the management accountant of ABC Limited for March:
The standard cost card for the company's only product is as follows:
Required:
(a) Calculate the following: (i) the actual production/sales volume; (ii) the actual number of hours worked; (4 marks) (4 marks) (iii) the actual quantity of materials pur- chased; (4 marks) (iv) the actual variable overhead cost in- curred; (2 marks) (v) the actual fixed overhead cost incurred. (2 marks)
(b) ABC Limited uses a standard costing system whereas other organizations use a system of budgetary control. Explain the reasons why a system of budgetary control is often preferred to the use of standard costing in non- manufacturing environments. (9 marks)
Step by Step Answer: