The following data have been collected for the month of April by a company which operates a standard absorption costing system:
Actual production of product EM 600 units
Actual costs incurred: (£)
Direct material E 660 meters 6 270
Direct material M 200 meters 650
Direct wages 3200 hours 23 200
Variable production overhead
(which varied with hours worked)
6 720
Fixed production overhead 27 000
Variances (£)
Direct material price:
Material E 330 F
Material M 50 A
Direct material usage:
Material E 600 A
Material M nil
Direct labour rate 800 A
Direct labour efficiency 1400 A
Variable production overhead:
expenditure 320 A
efficiency 400 A
Fixed production overhead:
expenditure 500 F
volume 2500 F
Opening and closing work in progress figures were identical, so can be ignored.
(a) Prepare for the month of April a statement of total standard costs for product EM; (3 marks)
(b) Prepare a standard product cost sheet for one unit of product EM;
(c) Calculate the number of units of product EM which were budgeted for April; (2 marks)