Question
Ashoka & Ronald Bhd. produces a single product for its overseas market. For control purposes, a standard costing system was recently introduced and has been
Ashoka & Ronald Bhd. produces a single product for its overseas market. For control purposes, a standard costing system was recently introduced and has been in operation since the last one month.
The details of the standard costs for the month of September 2015 are as follows:
Production & Sales : 1,500 units
Selling Price (per unit) : RM 1,800
Materials : 20 kg per unit at RM40 per kg
labour : 5 hours per unit at RM80 per hour
Variable Overhead : 5 hours per unit at RM30 per hour
Fixed Overhead : RM 450,000 per month =SR = 450,000/(1500X5HOURS)=RM60
The actual data for the month of September 2015 is as follows:
Produced : 1,450 units and sold at RM2,000 per unit =2,900,000
Material : Used 30,000kg of material at a total cost of RM 1,320,000
Labour : Paid RM 84 per hour to the labour force. The total amount paid out amounted to RM 672,000
Overheads
Variable : RM 220,000
Fixed : RM 520,000
ACTUAL PROFIT =2900000-1320000-672,000-220,000-520,000=168,000
Required:
(a) Calculate the standard cost for a unit produced by Ashoka & Ronald Bhd.
(b) Calculate the following variances:
- Material Price Variance
- Material Usage Variance
- Labour Rate Variance
- Labour Efficiency Variance
- Variable Overhead Expenditure Variance
- Variable Overhead Efficiency Variance
- Fixed Overhead Expenditure Variance
- Fixed Overhead Efficiency Variance
- Fixed Overhead Capacity Variance
- Sales Price Variance
- Sales Volume Variance
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