The following data relate to actual output, costs and variances for the four- weekly accounting period number 4 of a company that makes only one product. Opening and closing work in progress figures were the same.
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(£000) |
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Actual production of product XY |
18 000 units |
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Actual costs incurred: |
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Direct materials purchased and used (150 000 kg) |
210 |
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Direct wages for 32 000 hours |
136 |
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Variable production overhead |
38 |
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(£000) |
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Variances: |
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Direct materials price |
15 F |
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Direct materials usage |
9 A |
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Direct labour rate |
8 A |
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Direct labour efficiency |
16 F |
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Variable production overhead expenditure |
6 A |
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Variable production overhead efficiency |
4 F |
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Variable production overhead varies with labour hours worked.
A standard marginal costing system is operated.
You are required to;
(a) Present a standard product cost sheet for one unit of product XY,
(b) Describe briefly three types of standard than can be used for a standard costing system, stating which is usually preferred in practice and why.
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