Question 2: The Carat Pk a medium sized company, produces a single product in its one overseas factory. For control purposes a standard costing system was recently introduced and is now in operation The standards set for the month of May were as follows: Production and sales 16.000 units Selling price (per unit) (c) Brielly explain the possible reasons for inter-relationships between material variances and labour variances (5 Marks) Total 25 Marks END OF QUESTION 2 140 Materials Material 007 6 kilo per unit at 1225 per kilo Material XL 90 3 kilo per unit at 3 20 per kilo Labour 4.5 hours per unit at 8.40 per hour Overheads (all fixed) 85,400 per month. They are not absorbed into the product costs. The actual data for the month of May, is as follows. Produced 15,400 units which were sold at 133.25 each Materials Used 98.560 kilos of material 007 at the total cost of 1,256,640 and used 42,350 kilos of materials XL 90 at the total cost of 132,979 Labour Paid an actual rate of 8.65 per hour to the labour force. The total amount paid out, amounted to 612,766. Overheads (all fired) 95,840 Required: (a) Prepare a standard costing profit statement, and a profit statement based on actual figures for the month of May (8 Marks) (b) Prepare a statement of the variances which reconciles the actual with the standard profit or loss figure. (Mic and yield variances are not required) (12 Marks) CAMTINIEN AM NEYT DAGE