# Cost Accounting & Costing Methods | Assignment

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## Cost Accounting & Costing Methods | Assignment

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COSTINGTECHNIQUES1
Table of Contents1.(A) Calculation of variance and operating statement....................................................................3(B) Reasons of variances..................................................................................................................4(C). Standard marginal costing system & standard absorption costing system................................5Recommendations:...........................................................................................................................5(D) Report.........................................................................................................................................62. (A) Cost driver..............................................................................................................................6(B)(i) Cost driver per unit.................................................................................................................6(B)(ii) Allocation of overheads.........................................................................................................7(B)(iii) Total overheads.....................................................................................................................7(B)(iv) Overhead absorption per unit...............................................................................................7REFERENCES.....................................................................................................................................82
1.(A) Calculation of variance and operating statement Budgeted costCalculations Unit cost (in GBP)Direct labor 200*8%16Direct material 200*50%100Variable production overheads 200*8%'16Fixed production overheads 200*12%24Total production cost 156Administration overheads200*5%10Total 166Selling price 200Standard profit per unit 200-16634Number of units 40000Budgeted profit 1360000Sales price variance (210-200)*32000320000Sales quantity variance (32000-40000)*210-1680000Particulars BudgetedFlexedActual DifferenceDirect labor 640000512000704000-192000Direct material 400000032000003696000-496000Variable production overheads 640000512000640000-128000Fixed production overheads 960000960000810000150000Administration overheads40000040000035000050000664000055840006200000-616000Sales800000064000006720000320000Profit 1360000816000520000-296000Particulars Formula Calculations Results Type of varianceLabor varianceStandard hours 2000*80160000Standard cost/hour640000/1600004Labor rate variance (LRV)(standard rate-actual rate)*actual hours worked(4.00-4.40)*160000-64000AStandard time160000/400004Actual time 160000/320005Time variance No idle time Nil Efficiency variance (standard hours for actual output -Actual hours worked)*standard rate per hour (4*32000)-160000)*4-128000AMaterial variance Material price variance (MPV)(Standard price -actual price) *actual quantity (100-110)*33600-336000AMaterial usage variance (MUV)(standard quantity-Actual quantity)*standard price(32000-33600)*100-160000AVariable overheads3

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