Accounting entries for a standard costing system Bronte Ltd manufactures a single product, a laminated kitchen unit with a standard cost of 80 made up as follows; () Direct materials (15 sq. metres at 3 per sq. metre) 45 Direct labour (5 hours at 4 per hour) 20 Variable overheads (5 hours at 2 per hour) 10 Fixed overheads (5 hours at 1 per hour) 5 80 The standard selling price of the kitchen unit is 100. The monthly budget projects production and sales of 1000 units. Actual figures for the month of April are as follows: Sales 1200 units at 102 Production 1400 units Direct materials 22 000 sq. metres at 4 per sq. metre Direct wages 6800 hours at 5 Fixed overheads 6000 You are required to prepare: (a) A trading account reconciling actual and budgeted profit and showing all the appropriate variances (b) Ledger account in respect of the above transactions. (* The original examination question did not include part (b).)
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