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K Ltd makes two products. Information regarding one of this products is given below
Budgeted output sales 900 units
Standerd cost details for one unit
Direct materials :40 square meters at 5.30 per square metere
Direct wages: Bonding department: 24 hours at $5 per hour
Finishing department 15 hours at $4.80 per hourVariable overhead: $1.50 per bonding labour hour and $1 per finishing labour hour
Fixed production overhead :$36000
Fixed non production overhead : 27000Note: variable overheads are recovered/absorbed using hours, fixed overheads are recovered on a unit basis
Required : Prepare a standard cost card for one unit and enter on the Standerd cost card the following subtotals
1 Prime cost
2 Variable production cost
3 Total production cost
4 Total costB) calculate the selling price per unit allowing for a profit of 25% of the selling price
Please do not simply set full questions and expect us to provide an answer. You must have an answer in the same book in which you found the question, so you should ask about whatever it is in the answer that you are not clear about. Then I will explain.
This question could not be asked in Paper PM because it is a very basic Paper MA (was Paper F2) question and is much to simple for Paper PM.
Everything needed to be able to answer this question is explained in my free Paper MA lectures. The MA lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well (and similarly, the Paper free PM lectures cover everything needed to be able to pass Paper PM well 🙂 )
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