Intermediate: Calculation of inputs working backwards from variances The following data have been collected for the month of April by a company which operates a standard absorption costing system:

Opening and closing work in progress figures were identical, so can be ignored.

You are required to:

(a) prepare for the month of April a statement of total standard costs for product EM;
(3 marks)

(b) prepare a standard product cost sheet for one unit of product EM; (7 marks)

(c) calculate the number of units of product EM which were budgeted for April;
(2 marks)

(d) state how the material and labour cost stan¬ dards for product EM would originally have been determined.

Transcribed Image Text:

Actual production of product EM Actual costs incurred: Direct material E 660 metres 600 units () 6270 Direct material M 200 metres 650 Direct wages 3200 hours 23 200 Material E Material M Variable production overhead (which varied with hours worked) Fixed production overhead Variances Direct material price: Direct material usage: 6720 27 000 () 330 F 50 A Material E 600 A Material M nil Direct labour rate 800 A Direct labour efficiency 1400 A Variable production overhead: expenditure 320 A efficiency 400 A Fixed production overhead: expenditure 500 F volume 2500 F