Homework answers / question archive / ACCT210   Question 1   Skylar Solar System makes a single product the 'Solar'

ACCT210   Question 1   Skylar Solar System makes a single product the 'Solar'

Accounting

Share With

---

ACCT210

 

Question 1

 

Skylar Solar System makes a single product the 'Solar'. Details of the 'Solar' are as follows: 

 

                                                  $ per unit

Selling Price                              80.00 

Direct material                          30.00

 Direct labour                            16.00 

Variable production overhead 10.00 

Fixed production overhead      15.00 ? 

 

Fixed production overhead is $150,000 per month. This fixed overhead is absorbed on the basis of expected production of 10,000 units per month. ? 

 

There is no opening stock at the start of March ?

 

Variable selling and distribution is 10% of sales value

 ?

 Fixed selling and distribution $10,000 per month.

 ? 

In the month of March, 8,500 units were sold and 9,000 units were manufactured, 

 

Required 

a. Prepare the profit and loss statement for March under the absorption costing method. 

 

 b. Prepare the profit and loss statement for March under the marginal costing method. 

 

Question 2

 

Frosty Company makes designer wallets. The following actual costs relates to a batch of wallets:

 

 Number of wallets              50 

 

Direct Materials                  $ 8,100 

Direct Labour                      $ 15,000 ? 

 

• Production overheads are allocated on a labour hour basis. ?
• The Production Overheads are budgeted for $ 5,600. ?
• The budgeted labour hours are 1,600. ?
• 200 labour hours were spent on completing these wallets.

Required: Prepare the Job Card for this batch of wallets and show the cost per wallet 

 

 

Question 3

 

During the month of August the following costs were incurred in a process: 

 

Materials (5,000 kg)       $25,000 

Labour                              $38,000 

Overheads                       $30,000 

 

A normal loss of 10% of input was expected. Actual output was 4,600 kg. Losses are sold as scrap for $4.50 per kg. 

 

Required: 

a. Calculate the cost per kg 

 

b. Prepare Process Account  

 

c. Prepare Loss Account 

 

 

Question 4 

 

The following information is relevant to a manufacturer of plastic bowls 

 

Variable Cost per bowl:

 

                                 Direct labour                      $ 6.00 

                                 Direct Materials                 $ 4.75 

                                 Variable production costs $ 3.00 

Fixed costs: Production and Administrative    $ 135,000 

Selling price per bowl                                         $ 25.00

Sales volume                                                        20,000 bowls 

 

Required: 

a. Prepare profit and loss statement (under the marginal costing method)

 

b. Calculate the breakeven point in units 

 

 

Question 5

 

Ralph Byrd, Inc. wants to manufacture a new cell phone that can be worn on the wrist. Information from doing market research shows that he can sell this phone for $30 each. His fixed costs would be $135,000 a year and variable costs would amount to $12 per phone. 

 

Required: Determine the margin of safety, if he sold 25,000 units