production with actual profits b bonus amount earned by the workers during the month 666341

A company producing a standard product is facing declining sales and dwindling profits. It has therefore decided to introduce a standard cost system to control cost. To motivate workers to improve the productivity, the management has also decided to introduce an incentive scheme under which employees are paid 20% of the standard cost of materials saved and also 40% of the labour time saved valued at standard labour rate.

The following are the details of the standard cost of the product. Standard Cost Per Unit

During one particular month 9600 units of the product were manufactured and sold incurring the following actual cost:

Required: A]Variances that occurred during the month, duly reconciling the standard profits of actual

production with actual profits. B] Bonus amount earned by the workers during the month under incentive scheme.