(a) JB plc operates a standard marginal cost accounting system. Information relating to product J, which is made in one of the company departments, is given

Actual production and costs for month 6 were as follows:

(i) Prepare a columnar statement showing, by element of cost, the:
(i) Original budget;
(ii) Flexed budget;
(iii) Actual;
(iv) Total variances;
(ii) Subdivide the variances for direct material and direct labour shown in your answer to (a) (i)-(iv) Above to be more informative for managerial purposes.

Standard marginal product cost Unit (E) Product J Direct material 6 kilograms at 4 per kg 24 Direct labour 1 hour at 7 per hour Variable production overhead 3 34 Variable production overhead varies with units produced Budgeted fixed production overhead, per month: 100000. Budgeted production for product J: 20000 units per month. Units of J produced 18500 (E) Direct materials purchased and used: 113 500kg Direct labour: 17800 hours Variable production overhead incurred Fixed production overhead incurred 442650 129940 58800 104000 735390