Question
QUESTION 3 Read the following scenario and answer the questions that follow: (28 marks) Sticky Wicket (SW) manufactures cricket bats using high quality wood
QUESTION 3 Read the following scenario and answer the questions that follow: (28 marks) Sticky Wicket ("SW") manufactures cricket bats using high quality wood and skilled labour using mainly traditional manual techniques. The manufacturing department is a cost centre within the business and operates a standard costing system based on marginal costs. At the beginning of April, the production director attempted to reduce the cost of the bats by sourcing wood from a new supplier and deskilling the process a little by using lower grade staff on parts of the production process. The standards were not adjusted to reflect these changes. The variance report for April is shown below (extract): Variances Adverse Favourable R R Material price Material usage 5 100 7 500
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