Prancer Co. uses standard costing to control its costs and revenues. A standard cost card for its only product is given below together with a standard cost operating statement for last month.

Actual profit

Select the appropriate words, phrases or number to correctly complete the commentary on the last month’s results.

(a) Prancer Co uses standard ______ costing. In the last month actual selling price was ______ standard. (Absorption/Marginal) (higher than equal to lower than)

(b) Actual units sold were ______ budgeted and actual sales revenue was $______. (1,200 more than 1,200 less than/400 more than/400 less than) (549,000/560,000/1,600,000/1,640,000)

(c) Production was ______ than budgeted. (100 units less/100 units more/350 units more/2,000 units more)

(d) Materials caused the biggest cost variances, where a decision to pay ______ standard price resulted in the company using ______ budget. (less than/more than) (320kg more than original/320kg less than flexed/320kg more than flexed/320kg less than original)

Transcribed Image Text:

Standard cost card Selling price Direct materials 2kg @ 25/kg Direct labour 3 hours @ $10 per hour Fixed overhead 2 hours at $10 per hour Profit Standard cost operating statement Budgeted profit Sales volume variance Standard profit on actual sales Sales price variance Production cost variances Material price Material usage Labour rate Labour efficiency Fixed overhead expenditure Fixed overhead volume Actual profit Adverse 8,000 2,000 7,000 2,000 19,000 600,000 60,000 adv 540,000 20,000 fav 560,000 Favourable ($) 7,500 500 8,000 ($ per unit) 150 50 30 20 50 ($) 11,000 adv 549,000