CALCULATE IN DETAILED PLS
Question 3 Uncle Bros Boss (UBB) Limited a multinational firm produces Sharp Jean and operates a standard costing system. The information below show both the budget and the standard product cost for the first three (3) months of 2020: Budgeted and standard cost: Budgeted sales and production of Sharp Jean for the year 2020 are 400,000 units. Standard cost for each unit of Sharp Jean: Direct material: Clothing Material A: 1.2 meter costs $5 per meter Dyeing Material B: 5 kg (dye) costs $1.25 per kg Direct Labour 0.4 hours costs $12 an hour Page 3 of 5 ACC200321N It was stated that budgeted overheads were $1,250,000. Note that the Fixed production overhead is absorbed on labour hours. In addition, the actual data for the first three months of 2020 are shown below: Sharp Jean production and sales for this period were 450,000 units sold at standard price. Direct materials consumed: Clothing material A: 535,000 meters costing $2,750,000. Dyeing material B: 2,290,000 kg (dye) costing $2,919,750. Direct wages incurred 181,500 hours and cost $2,175,000. Meanwhile the actual fixed production overhead incurred $1,260,000. As the Management Accountant you were required to: 3 (A) Prepare the following variances and clearly show your workings. a. Material A Price b. Material A Usage C. Material B Price d. Material B Usage e. Labour Rate f. Labour Efficiency 9. Fixed Overhead Expenditure h. Fixed Overhead Capacity i. Fixed Overhead Efficiency (13.5 marks) 3(b) You are also asked to produce an Operating Statement for Uncle Bros Boss (UBB) Limited reconciling standard absorption cost of actual production to actual cost for last year. (3.5 marks) 3 (c.) Discuss problems you think could occur when standards are being set? (4 marks) 3 (d) Brief description of an ideal standard (2 marks) Question 3 Uncle Bros Boss (UBB) Limited a multinational firm produces Sharp Jean and operates a standard costing system. The information below show both the budget and the standard product cost for the first three (3) months of 2020: Budgeted and standard cost: Budgeted sales and production of Sharp Jean for the year 2020 are 400,000 units. Standard cost for each unit of Sharp Jean: Direct material: Clothing Material A: 1.2 meter costs $5 per meter Dyeing Material B: 5 kg (dye) costs $1.25 per kg Direct Labour 0.4 hours costs $12 an hour Page 3 of 5 ACC200321N It was stated that budgeted overheads were $1,250,000. Note that the Fixed production overhead is absorbed on labour hours. In addition, the actual data for the first three months of 2020 are shown below: Sharp Jean production and sales for this period were 450,000 units sold at standard price. Direct materials consumed: Clothing material A: 535,000 meters costing $2,750,000. Dyeing material B: 2,290,000 kg (dye) costing $2,919,750. Direct wages incurred 181,500 hours and cost $2,175,000. Meanwhile the actual fixed production overhead incurred $1,260,000. As the Management Accountant you were required to: 3 (A) Prepare the following variances and clearly show your workings. a. Material A Price b. Material A Usage C. Material B Price d. Material B Usage e. Labour Rate f. Labour Efficiency 9. Fixed Overhead Expenditure h. Fixed Overhead Capacity i. Fixed Overhead Efficiency (13.5 marks) 3(b) You are also asked to produce an Operating Statement for Uncle Bros Boss (UBB) Limited reconciling standard absorption cost of actual production to actual cost for last year. (3.5 marks) 3 (c.) Discuss problems you think could occur when standards are being set? (4 marks) 3 (d) Brief description of an ideal standard (2 marks)
