Calculate the standard cost and standard selling of product, Managerial Accounting

Question 1:

A company's budgeted production of Product Zebra for the month ending 30 November 2004 was 10,000 units. The fixed overheads were budgeted at Rs3,200,000.

The standard costs for the product are:

Direct materials - 6 litres of material A at Rs30 per litre
Direct labour - 4 hours at Rs50 per hour
Variable overhead is absorbed at Rs40 per labour hour
The manufacturer operates a standard marginal costing system and the standard selling price is set based on a mark-up of 25%.

The actual results for the month ended 30 November 2004 were:
Production: 9,800 units
Direct materials: 59,700 litres at a total cost of Rs1,761,150
Direct labour: 39,500 hours at a total cost of Rs1,920,800
Variable overheads incurred: Rs1,542,000
Fixed overheads incurred: Rs3,120,000

During the month of November 2004, the company managed to sell all the quantity produced by offering a 3 % discount on the standard price.


(a) State briefly any four problems which a firm may face when setting standards.

(b) Calculate the standard cost and standard selling of product Zebra

(c) Prepare a marginal cost operating statement for the month of May, reconciling the budgeted contribution to the actual profit using as many variances as the data permit.

Posted Date: 10/25/2013 7:53:41 AM | Location : United States

Related Discussions:- Calculate the standard cost and standard selling of product, Assignment Help, Ask Question on Calculate the standard cost and standard selling of product, Get Answer, Expert's Help, Calculate the standard cost and standard selling of product Discussions

Write discussion on Calculate the standard cost and standard selling of product
Your posts are moderated
Related Questions
The Value Chain and Cost Analysis The behavior of a firm's costs and its relative cost position stem from the value activities the firm performs in competing in an industry. A me

Problem: Fancy Foods Ltd uses a standard costing system to control its material and labour costs. The standard costs for January 2007 were as follows. Standard Costs Materi

John Doe, MD A Business Simulation This simulation covers the transactions completed by John Doe, MD, a medical service business, which began on July 1 of the current year. Dr. D

Risk seeking:  A risk seeker is a decision maker who is concerned in the best likely outcome no matter how small the chance that they might take place i.e. he takes high risks

STANDARD COSTING AND BUDGETARY CONTROL In practice, the terms standard cost and budgeted cost might be used interchangeably. Whereas it is possible to have budgeting without s

Final paper: CAPM and Capital Structure (2500 words max) Reflect on the course materials with specific focus on the last two papers (Sharpe; Modigliani & Miller). Synthesize the k

Q. Show the process of Pricing during introduction? Pricing during introduction: in pricing a new product generally two kinds of strategies are suggested viz. a) Skimming p

Explain Operating budgets These budgets relate to the dissimilar activities or operation of a firm the number of such budgets depends upon the size and nature of business. The

I don''t know how to do a variable income statement. Here is my assignment: The Used Books Company is a small online retailer operating out of a garage apartment. The owner buys

How costs behave as the level of activity/volume changes.  Why an understanding of cost behaviour is important ? Types Variable e.g. petrol, direct materials Fixed e.g.