Question 3 (27 marks) Windhoek Beauty Products ("WBP") applies a standard marginal costing system to produce a cosmetic that they sell in the Namibian market. The details of their production for the month of August 2020 are as follows: Budget Actual Sales/production in units 6 000 5 500 Total sales revenue N$600 000 N$660 000 Total materials 24 000kgs 24 750kgs Material cost N$240 000 N$222 750 Total labour hours 18 000 hours 15 125 hours Total labour cost N$216 000 N$211 750 Fixed production overheads N$ 100 000 N$110 000 The company applies an efficient just in time technique and so does not keep inventories of any kind. WBP's strategy is to ensure that they retain a motivated staff compliment that would always go an extra mile to ensure the company's profitability. Mark 2 18 Requirement 3.1 Prepare a standard cost card for one unit of the cosmetic. 3.2 Calculate all the possible variances and present them in a statement that reconciles budgeted contribution to the actual. 3.3 Advise WBP on the best standards to use in order to achieve their strategic objectives. Your answer should justify why other standards are not appropriate. 3.4 Some people say standard costing is no longer relevant in the current business environment. List three advantages of using standard costing. N.B. Where applicable show all workings. Total 4 3 27