Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!







HI5017 Managerial Accounting

Unit Code: HI5017

Unit Name: Managerial Accounting

Question 2, (Week 3):

Part a:

manufacturing cost for Job no X10

Particulars

unit

per Unit cost

Total

material

$ 22,800.00

Labour

600

$ 16.00

$ 9,600.00

Overheads

400

$ 30.00

$ 12,000.00

Manufacturing job cost

$ 44,400.00

The total cost of manufacturing Job No X10 is $44400.

Part b:

Total Manufacturing Job cost (X10)

$ 44,400.00

Number of units produced

150

Cost per Unit ( Total cost/number of units produced)

$ 296.00

In the given case, the cost per unit manufacturing is amounting to be $296.

Part c:

Per unit cost information is very important in any decision making process. It helps to determine the overall cost and decision about price positioning is also taken after analysis of per unit cost. It is also used for determining the breakeven point.

Question 2 (week 5):

Part 1:

Activity rates for each overhead Item

Activity cost Pool

Cost Driver

Estimated overhead

Expected Use of Cost Driver

Cost per Activity

Purchasing

Number of orders

$ 12,00,000.00

40000

$ 30.00

Machine Setups

Number of Setups

$ 9,00,000.00

18000

$ 50.00

Machining

machine Hours

$ 48,00,000.00

120000

$ 40.00

Quality Control

Number of inspection

$ 7,00,000.00

28000

$ 25.00

One should estimate or know about the total cost and number of activities for the purpose of calculating the cost of an activity. It can be known through preparation of a cost sheet.

Part 2:

Cost Drivers

TRI-X product

Unit cost

Total

Purchase order

17000

$ 30.00

$ 5,10,000.00

machine Setups

5000

$ 50.00

$ 2,50,000.00

Machine Hours

75000

$ 40.00

$ 30,00,000.00

Inspection

11000

$ 25.00

$ 2,75,000.00

Total overhead cost

$ 40,35,000.00

Units produced

26000

Overheads cost

$ 155.19

The total overhead cost of the activity amounts to $4035000. The cost is $4035000 when the activity consumes a certain amount of machine hour, setup and inspections. The amount of these factors used by the activity is mentioned in the table. Overhead cost is $155.19 when a total of 26000 units are manufactured by the plant.

Part 3:

Cost allocation as per ABC costing

Unit

per unit cost

Total

Direct materials

$ 700.00

Direct labour

6

20

$ 120.00

Manufacturing overhead

$ 155.19

Total cost per Unit

$ 975.19

The profit earned by the company is more than what it has targeted. The amount of profit earned is $625(1600-975). The rate of manufacturing overhead is reduced to $155.19. There is no change in the rate of consumption of labor and material in the production process. The cost which was estimated by the traditional overhead costing method was more than the actual cost. The cost is $975.19 which is lower than the estimated cost.

Question 3, week 6:

Part a:

Cash Receipts Budget Schedule

Month

July

August

September

Immediately ( 15% of the Total sales)

$ 20,160.00

$ 30,240.00

$ 40,320.00

One month later (25% )

$ 35,000.00

$ 52,500.00

Two Months later (40%)

$ 56,000.00

Three months later 20%

Total Monthly Receipts

$ 20,160.00

$ 65,240.00

$ 1,48,820.00

The sales forecast is attached in Appendix 1:

Part b:

Cash payments Budget Schedule

Month

July

August

September

Payments For material Purchase

$ 1,06,800.00

$ 1,04,640.00

$ 1,31,280.00

Material purchase requirement in attached in appendix 2

Part c:

Cash Budget for the Month Of July

Cash Receipts

Amount

Contribution of owner

250000

Collection from sales

$ 20,160.00

Total cash available

$ 2,70,160.00

less: payments

payments for Direct material

$ 1,06,800.00

payments for labour cost

$ 14,500.00

Payments for variable cost (65% paid in the Month incurred)

$ 18,850.00

Fixed overhead cost ( 60 % paid in the month incurred)

$ 42,000.00

Total payments

$ 1,82,150.00

Closing cash ( Total cash avilable - payments )

$ 88,010.00

Workings:

Annual overhead cost

840000

Monthly cost ( Annual cost / 12)

70000

Question 2- Week 8:

Part a:

Variable production cost for minimum transfer pricing is taken into consideration only if the plant has enough capability to meet both internal and external product need. In the given case the minimum transfer price that is considered is $3. It is also the cost of producing.

Part b

In a case where the company has the ability to meet only one need that is either external or internal, transfer pricing will consider the higher price amongst the both. Transfer price will consider the higher price to increase the profit for the department. Here the market price is greater than the internal price. Hence, the product will be recorded at $4 when it is bought by the perfume department from bottling department.

Part c:

The company can directly purchase the product from the market at a price of $3.5. When the market price is $3.5, then the maximum price that can be reimbursed by the presume department can be $3.5.

Part d:

Production capacity of a manufacturing plant helps in determination of the cost based transfer price and market based transfer price. Market based transfer price will be applied in the case where the ability of the manufacturing plant is limited. Cost based transfer price is used in the case where the company has enough capacity to meet both internal and external needs for the products.

Question 3 (Week 10)

  1. Based on the problem given in the assignment, the weighted average unit of contribution margin is as follows:

Particulars

Alpha

Beta

Gamma

Sales Mix (a)

50%

40%

10%

Selling Price per Unit (b)

250

400

1500

Variable cost per unit ©

80

200

800

Contribution margin per unit (d= b-c)

170

200

700

Weights assigned to each product (a*d)

85

80

70

weighted average contribution Margin per Unit

235

A margin of $235 will be used in respect to produce one single unit of a product. $235 is the amount of weighted average contribution margin. All these information can be known and understood from the table given above. The table gives information about weighted average contribution margin per unit.

  1. The break-even sales in Unit = Total fixed cost / Average Contribution Margin

= $5,000,000 / 235 = 21,277 units

Breakeven point for printer

Alpha = 21,277 * 50% = 10,638 units

Beta = 21,277 * 40% = 8511 units

Gamma = 21,277 *10% = 2128 units

IPM should sell 8511 units of beta, 21277 units of alpha and 2128 units of gamma as per the calculation. Production of these units is necessary to achieve the breakeven point by the business.

  1. Projected sales = 25,000 units

Breakeven point sales = 21,277 units

Margin of Safety = 25,000 – 21,277 = 3723 units

Question 3 (Week 11)

Minimum Acceptable Price Per Unit

Relevant Costs

Amount per Unit

Total Cost

Direct Materials

$ 57.00

$ 570,000.00

Direct labor

$ 60.00

$ 600,000.00

Variable Manufacturing Overhead

$ 16.80

$ 168,000.00

Shipping Cost

$ 9.00

$ 90,000.00

Import Duties and other special Costs

$ 42,000.00

Total Relevant Cost

$ 1,470,000.00

Total Units

$ 10,000.00

Minimum Acceptable Price Per Unit

$ 147.00

GEM would incur a total cost of $1,470,000 as per the table and information provided. GEM has a capability to sell 10,000 units. Through the use of this information the minimum acceptable price is calculated. The minimum acceptable price stands at $147. The minimum acceptable price is considered as the price in which a product should be sold to gain some amount of profit.

The products in this case have blemishes because of which it is not possible to sell them at normal price. So it would be relevant to consider administration and variable cost which stands at $10.20. The company should sell the products at a minimum price of $10.20 in order to cover the minimum cost. A cost of $12.20 covers both administration and variable cost.

A consistent or similar future cost over the year has no use. They even do not play a significant role in decision making process. If incremental fixed cost changes then the future cost changes. Future cost plays an important role for making decisions related to future expenses but it is not used in all kinds of decision making.

References:

Juranek, S., Schindler, D. and Schjelderup, G., 2018. Transfer pricing regulation and taxation of royalty payments. Journal of Public Economic Theory, 20(1), pp.67-84.

HOOZÉE, S. and HANSEN, S.C., 2018. A Comparison of Activity-Based Costing and Time-Driven Activity-Based Costing. Journal of Management Accounting Research, 30(1), pp.

Asongu, S.A., Uduji, J.I. and Okolo-Obasi, E.N., 2019. Transfer pricing and corporate social responsibility: Arguments, views and agenda. Mineral Economics, 32(3), pp.353-363.

Rossing, C.P., Cools, M. and Rohde, C., 2017. International transfer pricing in multinational enterprises. Journal of Accounting Education, 39, pp.55-67.

Juranek, S., Schindler, D. and Schjelderup, G., 2018. Transfer pricing regulation and taxation of royalty payments. Journal of Public Economic Theory, 20(1), pp.67-84.

Appendix 1

Month

July

August

September

October

Budgeted production volume

1450

1650

2120

2460

Closing stock in hand (20% of the next month’s sale)

330

424

492

Less: Stock in hand

330

424

492

Total production requirement ( In units)

1780

1744

2188

1968

material cost per Month @60 per unit

$ 1,06,800.00

$ 1,04,640.00

$ 1,31,280.00

Direct Labor cost per Month @10 per unit

$ 14,500.00

$ 16,500.00

$ 21,200.00

Variable Production cost @20 per unit

$ 29,000.00

$ 33,000.00

$ 42,400.00

Appendix 2:

Month

July

August

September

October

November

Sales Unit

1000

1500

2000

2400

2600

Selling Price

$ 140.00

$ 140.00

$ 140.00

$ 140.00

$ 140.00

Total sales

$ 1,40,000.00

$ 2,10,000.00

$ 2,80,000.00

$ 3,36,000.00

$ 3,64,000.00

Download Sample Now

Earn back money you have spent on downloaded sample



Upload Document Document Unser Evaluion Get Money Into Your Wallet



Cite This work.

To export a reference to this article please select a referencing stye below.

Assignment Hippo (2021) . Retrive from http://www.assignmenthippo.com/sample-assignment/hi5017-managerial-accounting

"." Assignment Hippo ,2021, http://www.assignmenthippo.com/sample-assignment/hi5017-managerial-accounting

Assignment Hippo (2021) . Available from: http://www.assignmenthippo.com/sample-assignment/hi5017-managerial-accounting

[Accessed 27/07/2021].

Assignment Hippo . ''(Assignment Hippo,2021) http://www.assignmenthippo.com/sample-assignment/hi5017-managerial-accounting accessed 27/07/2021.


Want latest solution of this assignment

Want to order fresh copy of the Sample HI5017 Managerial Accounting Answers? online or do you need the old solutions for Sample HI5017 Managerial Accounting, contact our customer support or talk to us to get the answers of it.


Submit Your Assignment Here

AssignmentHippo Features

On Time Delivery

Our motto is deliver assignment on Time. Our Expert writers deliver quality assignments to the students.

Plagiarism Free Work

Get reliable and unique assignments by using our 100% plagiarism-free.

24 X 7 Live Help

Get connected 24*7 with our Live Chat support executives to receive instant solutions for your assignment.

Services For All Subjects

Get Help with all the subjects like: Programming, Accounting, Finance, Engineering, Law and Marketing.

Best Price Guarantee

Get premium service at a pocket-friendly rate at AssignmentHippo

FREE RESOURCES

  • Assignment Writing Guide
  • Essay Writing Guide
  • Dissertation Writing Guide
  • Research Paper Writing Guide

FREE SAMPLE FILE

  • Accounts
  • Computer Science
  • Economics
  • Engineering

Client Review

I was struggling so hard to complete my marketing assignment on brand development when I decided to finally reach to the experts of this portal. They certainly deliver perfect consistency and the desired format. The content prepared by the experts of this platform was simply amazing. I definitely owe my grades to them.

Tap to Chat
Get instant assignment help