Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Managerial Accounting Expert

problem1) ABSORBTION VS VARIABLE COSTING

Energize Ltd is a manufacturing company which has started producing a specialist device and has the following data for the first month of operation, January 2013:

Unit information:                                                             units
Opening inventory                                                             0
Sales                                                                              35000
Production                                                                      40000
Closing Inventory                                                             5000
Cost information:
Manufacturing costs:
                                                                                        Rands
Direct materials                                                              R 30 per unit
Direct labour                                                                  R 14 per unit
Variable manufacturing overhead expenses                     R 4 per unit
Fixed manufacturing overhead expenses                         R1280000
Selling and administrative costs:
Variable selling and administrative expenses                    R4 per unit
Fixed selling and administrative expenses                       R1120 000

Each device is sold at R120. Fixed overheads are allocated on the basis of production units.

Management is anxious to see how the new device is performing in terms of profitability.

Required:

1.1 Compute unit product cost for one device (unit) assuming the:

1.1.1 Absorption costing system is used.

1.1.2 Variable costing. system is used.

1.2 Prepare an income statement for Energize Ltd for January 2013 under the variable costing system.

problem2) COST–VOLUME–PROFIT ANALYSIS

Easy-Answer Ltd manufactures and sells telephone answering machine. Company’s income statement for the most recent year is given below:

                                            Total (R)                 Per unit (R)               Percentage
Sales                                  1200 000                      60                               100
Less: Variable expenses     (900000)                       45                                 ?
Contribution margin            300 000                        15                                 ?
Less: Fixed expenses         (240000)
Net income                         60 000

Management is anxious to improve company’s profit performance and has asked for several items of information.

Required:

2.1 Compute company’s contribution margin ratio (as a percentage).

2.2 Use breakeven formula to compute the company’s breakeven point in units and in Rands.

2.3 Compute the company’s margin of safety as a percentage.

2.4 Suppose that next year management wants the company to earn a minimum profit of R90000. How many units will have to be sold to meet this target profitfigure?

2.5 Suppose that sales increases by 4000 units next year. If cost relationships remain unchanged and selling price is constant, what will the company’s new net income be? (Draft a short marginal costing statement to support your answer.)

Managerial Accounting, Accounting

  • Category:- Managerial Accounting
  • Reference No.:- M93118

Have any Question? 


Related Questions in Managerial Accounting

Individual research paper instructions1write a 8-10-page

INDIVIDUAL RESEARCH PAPER INSTRUCTIONS 1. Write a 8-10-page, double-spaced research paper that adheres to APA format. 2. It must include references from at least 6 different sources, a title page, and a reference page. 3 ...

Managerial accounting budgeting project- springthe

Managerial Accounting Budgeting Project- Spring The following is a Comprehensive Budgeting Problem. You and your team need to prepare a partial Master Budget and then continue on to analyze your data. This is an Excel ba ...

Accounting for managers- assignmentfinancial statement

Accounting for Managers- Assignment Financial Statement Analysis The following information relates to Harris Corporation. Account Current year Prior year Net sales (all credit) $520,125 $499,500 Cost of goods sold $375,9 ...

Need research paper by december 5th 2016compose a research

Need Research Paper by December 5th, 2016 Compose a research paper that discusses the use of either the balanced scorecard or economic value added as a tool for improving organization performance. The paper must be doubl ...

Question wmtb is an independent television station run by a

Question: WMTB is an independent television station run by a major state university. The station's broadcast hours vary during the year depending on whether the university is in session. The station's production crew and ...

Managerial accountingvenus brewery is a craft brewery that

Managerial Accounting Venus Brewery is a craft brewery that produces a special light beer for ladies. The beer are processed sequentially in two departments (Department X and Department Y) before the final products are t ...

Suppose a firm has had the historical sales figures shown

Suppose a firm has had the historical sales figures shown as follows. What would be the forecast for next year's sales using REGRESSION to estimate a trend? 2008: $2,000,000 2009: $1,800,000 2010: $2,200,000 2011: $2,400 ...

Accounting1 from the e-activity assess the advantages and

Accounting 1. From the e-Activity, assess the advantages and disadvantages of the continued use of the traditional relational database and then decide if businesses should be moving toward relational databases in the clo ...

Managerial accounting-you have just been hired as a

Managerial Accounting- You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company's financial statement ...

The facts and figures relating to irrigation corporation

The facts and figures relating to Irrigation Corporation are as follows. Irrigation Corporation produces plastic garden sprinklers. The company is preparing its budget for 2016. The first step is to plan for the first qu ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen