The Following Information Relates to Questions 17 to 21
Waratah $\bullet$

question 10

Multiple Choice

The following information relates to questions 17 to 21
Waratah Ltd acquired a 60% ownership interest in Bottle Brush Ltd on 30 June 2013. On the same day, Bottle Brush Ltd acquired a 70% ownership interest in Honeydew Ltd.
The following interentity transactions have taken place between the entities in the group during the years ended 30 June 2014 and 30 June 2015:
$\bullet$ On 1 July 2013 Bottle Brush sold an item of plant to Honeydew for a profit of $20 000. The remaining useful life of the plant at the date of transfer was 4 years.
$\bullet$ On 1 September 2013, Honeydew paid a dividend of $70 000 from profits earned since 30 June 2013.
$\bullet$ Waratah lent $50 000 to Bottle Brush on 1 January 2014. Interest charged on the loan for the year ended 30 June 2014 was $2000 and for the year ended 30 June 2015 was $4000.
On 31 May 2014 Honeydew sold inventory to Waratah for $15,000. Profit earned on the sale was $5000. Waratah sold the inventory to external parties on 1 August 2014.
Details of profits earned by entities within the group for the years ended 30 June 2014 and 30 June 2015 are:

The tax rate is 30%.
-The NCI share of profit in Honeydew for the year ended 30 June 2014 is:

• A) $4 950
• B) $6 000
• C) $9 570
• D) $11 600

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Definitions:

Normal Standards

The expected performance or cost levels under normal operating conditions, used for budgeting or measuring efficiency.

Ideal Standards

Benchmark or optimal performance levels set in managerial accounting to evaluate operational efficiency, without considering any business constraints.

Theoretical Standards

Idealized cost and efficiency targets in manufacturing or production, based on perfect operating conditions.

Standard Cost Variances

The differences between the expected (standard) costs and the actual costs incurred.