Briefly explain the meaning of the following terms: (i) Ideal standard costs (ii) Attainable standard costs The

 Briefly explain the meaning of the following terms: 

(i) Ideal standard costs

(ii) Attainable standard costs

 

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The management accountant of Bridgetown Ltd is finding it difficult to cope with increasing demands for information and has asked for your help. You have been asked to prepare variance analysis information for the April board meeting. You have been provided with budgeted and actual information as shown below. Production in units Direct materials Direct labour Variable production overheads Budgeted information for Actual results achieved the month of April for the month of April 27,000 25,000 (263,250 Kgs) £394,875 (250,000 Kgs) £362,500 (87,500 hours) £1,089,375 £271,250 (97,200 hours) £1,190,700 £306,180 Notes: Actual fixed production overheads for April amounted to £172,400. Budgeted fixed production overhead is £175,000 per month. Variable production overheads are applied to products based on budgeted labour hours. ■ Requirement (a) Prepare a cost statement showing the original budget, flexed budget and actual results. 8 Marks (b) Calculate relevant variances in as much detail as the information permits. 14 Marks The management accountant of Bridgetown Ltd is finding it difficult to cope with increasing demands for information and has asked for your help. You have been asked to prepare variance analysis information for the April board meeting. You have been provided with budgeted and actual information as shown below. Production in units Direct materials Direct labour Variable production overheads Budgeted information for Actual results achieved the month of April for the month of April 27,000 25,000 (263,250 Kgs) £394,875 (250,000 Kgs) £362,500 (87,500 hours) £1,089,375 £271,250 (97,200 hours) £1,190,700 £306,180 Notes: Actual fixed production overheads for April amounted to £172,400. Budgeted fixed production overhead is £175,000 per month. Variable production overheads are applied to products based on budgeted labour hours. ■ Requirement (a) Prepare a cost statement showing the original budget, flexed budget and actual results. 8 Marks (b) Calculate relevant variances in as much detail as the information permits. 14 Marks

Answer rating: 100% (QA)

Answer Answer i Ideal standard costs Ideal standard costs represent the costs that a company expects to incur under optimal conditions assuming efficient operations and no waste or inefficiencies Thes... View the full answer