Accounting 9706 · AS & A Level · Standard costing

Standard costing — practice question

Refer to Source B in the insert.
(a)[14]

Fill in the table below so that the standard profit for April 2025 is reconciled to the actual profit by using the required variances. Put each variance in the favourable or adverse column where it belongs.

(b)[4]

Discuss how useful variance analysis is in this situation.

(c)[7]

Advise the directors whether they ought to continue with the change in material. Justify your answer and back it up with relevant calculations.

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