JB Ltd. a construction business, currently owned by XYZ Plc., operates a standard marginal cost accounting system. Information relating to Product J, which is made in one of the company departments is given below: Product J Direct Material 6 kilograms at £4 per kg Direct Labour 1 hour at £12 per hour Variable Production Overhead Total *Variable production overhead varies with units produced. Budgeted fixed production overhead, per month: £100,000. Budgeted production for Product J: 20,000 units per month. Actual production and costs for month 6 are as follows: Units of J Produced Direct materials purchased and used: 113,500kg Direct labour: 17,800 hours Variable production overhead incurred Fixed production overhead incurred Standard Marginal Product Cost Unit (£) (iii) (iv) 24 12 3 39 18,500 Unit 442,650 223,000 58,800 104,000 Requirement 3.1 Prepare a columnar statement showing, by element of cost, the: Original Budget; (ii) Flexible Budget; Deia het and Actual; Total Variances 1 -The end-- ^ Lan statemen dạng bảng beang 3.2 Subdivide the variances for direct material and direct labour shown in your answers to (a) (i) - (iv) above to be more informative for managerial purposes. 3.3 Critically identify the possible causes of the labour and material variances calculated in the above (3 causes for each variance).
