Question

The following data are given for product DRIM69

Budgeted output for the year:        9800 units

Standard details for one unit:

Direct materials:                               40 square metres at K5.30 per square metre

Direct wages:

Bonding department                                   48 hours at K12.50 per hour

Finishing department                                  30 hours at K7.60 per hour

Budgeted costs and hours per annum:

Variable overhead:                                      (K)                                           (hours)

Bonding department                                   375000                                   500000

Finishing department                                  150000                                   300000

Fixed overhead:                                           (K)                                          

Production                                                    392000

Selling and distribution                              196000

A. Prepare a standard cost sheet for one unit and enter on the standard cost sheet the costs to show sub-totals for

prime cost

variable production cost    

total production cost

total cost       

Answer 1

Solution

Output	9800 units
	Materila Required	40 Sq m for one unit at 5.3
	Particulars	Amount	Amount
a)	Prime Cost
	Direct Material		2077600
	(9800*40*5.3)
	Direct Labour
	Boarding	1176000
	(9800*48*2.5)
	Finishing	2234400	3410400
	(9800*30*7.60)
	Prime Cost		5488000
	(D M + D L)
b)	Variable Production cost
	Variable Over head
	Boarding		352800
	(9800*375000/500000*48)
	Finishing Department	147000
	(9800*150000/300000*30)
	Variable Production Cost	5987800
c)	Total Production Cost
	Total Variable Cost	5987800
	Fixed Production cost	392000
	Total Production Cost	6379800
d)	Total Cost
	Total Production cost	6379800
	Selling and Distribution	196000
	Total Cost		6575800

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