Standard Cost Card

Good evening Mr John,

It’s probably something simple, but I’m blank…
Could you help on the following questions:

1)Isma plc has budgeted to produce and sell 20,000 units of Rondal in 20X7. The standard cost card for a unit of Rondal is as follows:

$

Materials 3.00

Labour 5.00

Variable production overhead 2.50

Fixed production overhead 2.00

Variable sales overhead 0.75

Fixed sales overhead 1.25

Profit 0.50

_____

Selling price 15.00

_______

In 20X7, Isma plc produces 21,000 units and sells 19,000 units. Its costs incurred were as expected for this level of activity.

1How much fixed overhead in total did Isma expect to incur in 20X7?

Select one:
a.
$60,000
b.
$55,000
c.
$65,000
d.
$70,000

2)Isma plc has budgeted to produce and sell 20,000 units of Rondal in 20X7. The standard cost card for a unit of Rondal is as follows:

$

Materials 3.00

Labour 5.00

Variable production overhead 2.50

Fixed production overhead 2.00

Variable sales overhead 0.75

Fixed sales overhead 1.25

Profit 0.50

_______

Selling price 15.00

_______

In 20X7, Isma plc produces 21,000 units and sells 19,000 units. Its costs incurred were as expected for this level of activity.

What was Isma plc’s inventory valuation under an absorption costing system?

Select one:
a.
$23,000
b.
$24,000
c.
$25,000
d.
$22,000

Thanks in advance for you help!