Standard costing system.

1. Anderson Ltd. manufacture gearboxes for use in cars. At the start of the year, the management of Anderson Ltd. estimated that its costs would be: of sales value Direct labour Direct material 50 Variable production overhead Fixed production overhead 12 Administration overhead This was based on the following: 80 employees 2000 hours worked by each employee 40 000 gearboxes manufactured in the year as budgeted production 200 unit selling price. You have recently been employed by the company to establish a standard costing system. At the end of the year you were able to extract the following information 1abour costs 4.40/hour 32,000 units sold 210/unit selling price 160 000 hours were worked variable production overheads were 640 000 fixed production overheads were 810 000 administration costs were 350 000 raw material prices were 10% higher than expected total expenditure on raw material was 3.696 M there were no opening or closing stocks of raw materials