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Here in bpp kit,
Admin selling and distribution cost are also included in standard cost of salesNeed explanation sir
Q.24.8I can only think that you are using an old edition of the Revision Kit, because question 24.8 in the current edition of the Paper MA Revision Kit is nothing to do with what you have asked.
24.8 Swindle Co makes widgets. Two types of labour are involved in the production of a widget, skilled and unskilled. Skilled labour is paid $15 per hour and unskilled $3 per hour. Twice as many unskilled labour hours as skilled labour hours are needed to produce a widget, six unskilled labour hours being needed.
A widget is made up of two different direct materials. Five kg of Material X and two metres of Material Z are needed. Material X costs $2 per kg and Material Z $5 per metre.
Variable production overheads are incurred at Swindle at the rate of $3.00 per direct skilled labour hour.
The basis of fixed cost absorption is direct skilled labour hours. For the coming year, budgeted fixed production overheads are $100,000 and budgeted production of widgets is 10,000 units.
Administration, selling and distribution overheads are added to products at the rate of $20 per widget, and a mark-up of 15% is made on each.
Task 1
Complete the standard cost card for a widget:
Standard cost card for a widget $ Direct materials – X …..
Direct materials – Z ….
Direct labour – skilled…..
Direct labour – unskilled…..
Variable production overhead…..
Fixed production overhead…..
Admin selling and distribution overhead.. Standard cost of sale….
Standard profit…
Standard sales price…This is the question sir
Here to get standard cost of sales
Bpp has added all the cost along with admin selling and distribution overhead, is that correct?
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