Management Accounting 1B

Question 3 (20 Marks, 36 Minutes) A company manufactures a single product using a process costing system. The following information relates to the month of July 2018: 1 July 2018: N$ Work in progress: Material 15 000 units (100% complete) 50 000 Conversion (40% complete) 35 000 Units introduced in the current period 25 000 Units completed 28 000 Work in progress on 31 July 2018 (units) 8 000 Costs incurred in current period: Material 65 000 Conversion 43 120 WIP on 31 July 2018 is 100% complete (material) and 60% complete (conversion) Additional information: Materials are added at the beginning of the process. Inspection for losses takes place when the process is 100% complete. Normal loss is 10% of the units that reached the inspection point. . The company employs the FIFO method in valuing its inventory. Required: MARKS Prepare a fully-fledged cost production statement for the month of July 2018. 20 Total marks for Question 3 20Question 5 (15 Marks 27 Minutes) Mr. Murangi is the head of operations at the manufacturing company where you are doing a three -month internship. He recently attended a public lecture at the University of Namibia and one of the speakers from the school of accounting, Mr. Heyns mentioned that standard costing can still be used in a meaningful way by businesses in this modern evolving economy. Mr Murangi learned that you are a student of management accounting who is able to help him understand these concepts. He gives you the following standard details for one of the company's products: Materials: 3.5 metres . N$12 ner metre Direct labour: 4 hours @ N$10 per hour Variable overhead: 8 hours - N$7.5 aer hour Fixed manufacturing overheads are expected to be N$ 192 000 allocated based on direct labour hours and a standard production volume of 4 000 units. Actual results for the 4 050 units and relating to direct costs for the period in question were the following: Materials: 3.3 metres . N$11.8 er metre Direct labour: 3.8 hours @_N$11 per hour REQUIRED: Why standard costing is considered as an important tool for any business enterprise? Calculate the total standard cost of each unit of production. Use the information given to calculate the following variances and in each case, eggalain the possible cause of the type of variance obtained: 5.3 Material price variance Labour efciency variance TOTAL MARKS FOR QUESTION 5