Question 4: Standard costing

Simple Ltd uses variance analysis as a method of cost control. Information for the year ended 30 June 2000 is as follows;

BudgetProduction for the year1400 units

Direct materials (Quantity 2800 at 4)11,200

Direct Labour (700 hours at 9.5/hour)6,650

Total17,850

ActualProduction for the year1,200 units

Labour hours for year750 hours

Labour cost for year7,200

Materials used in year2,700

Materials cost for year10,260

Question.

Reconcile the budgeted and actual costs.