Accounting 9706 · AS & A Level · Standard costing

Standard costing — practice question

Tareq produces one product and operates a standard costing system. The July budget is based on standard data, and the actual results are given.
(a(i))[2]

Calculate the material price variance for July.

(a(ii))[2]

Calculate the material usage variance for July.

(a(iii))[2]

Calculate the labour rate variance for July.

(a(iv))[2]

Calculate the labour efficiency variance for July.

(a(v))[2]

Calculate the fixed production overhead expenditure variance for July.

(a(vi))[2]

Calculate the sales price variance for July.

(a(vii))[2]

Calculate the sales volume variance for July.

(b)[5]

Prepare a statement reconciling the budgeted profit for 10 000 units with the actual profit for July.

(c)[6]

Assess the implications of this change in material cost using the actual material used in July. Support your response with suitable calculations.

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