Accounting 9706 · AS & A Level · Standard costing

Standard costing — practice question

Study Source B in the insert.
(a)[3]

Prepare the fixed budget for August and show the budgeted profit.

(b)[2]

Explain why a business produces a flexible budget statement.

(c(i))[2]

Calculate the following variances for fixed overhead expenditure.

(c(ii))[3]

Calculate the following variances for fixed overhead volume.

(d(i))[4]

Explain the likely causes for the adverse variances of the total direct material cost.

(d(ii))[4]

Explain the likely causes for the adverse variances of the total direct labour cost.

(e)[7]

Advise the directors whether they should switch to the overseas supplier or not. Justify your answer.

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