Question 2 a) Identify and describe the purposes of a standard costing system [10 Marks] b) From the following multiple choice question, identify the correct answer and show all your workings. i) During a period, 17,500 labour hours were worked at a standard cost of N$6.50 per hour. The labour efficiency variance was N$7,800 favourable. How many standard hours were produced? A. 1,200 B. 16,300 C. 17,500 D. 18,700 [5 Marks] ii) T plc uses a standard costing system, which is material stock account being maintained at standard costs. The following details have been extracted from the standard cost card in respect of direct materials: 8kg at N$0.80/kg =N$6.40 per unit Budgeted production in April was 850 units The following details relate to actual materials purchased and issued to production during April, when actual production was 870 units: Material purchased Material issued to production 8,200 kg costing N$6,888.00 7,150 kg Which of the following correctly states the material price and usage variance to be reported? Show all your workings. [10 Marks] ABCDE Price Usage N$286(A) N$152(A) N$286(A) N$280(A) N$286(A) N$294(A) N$328(A) N$152(A) N$328(A) N$280(A) [Total 25 Marks]