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Homework answers / question archive / Cost and Management Accounting Assignment No
Cost and Management Accounting
Assignment No. 2 (Due Date: Dec. 15, 2020)
Note: All assignments plagiarized or submitted after due date will have zero credit
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Q.1 |
Given the following information: |
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Existing |
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Units |
Per Unit |
$ |
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Production Capacity |
15000 |
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Sales |
1000 |
100 |
100000 |
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VC |
1000 |
60 |
60000 |
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TCM |
1000 |
40 |
40000 |
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Annual FC |
20000 |
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Profit |
20000 |
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Special Order |
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Units |
Per Unit |
$ |
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Sales |
5000 |
70 |
350000 |
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VC |
5000 |
60 |
300000 |
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Material cost for adding Logo |
2 |
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Cost of special equipment |
2000 |
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(to be used only once) |
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Annual fixed costs will remain unchanged |
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Instructions: |
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Compute: |
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1 |
Incremental revenue from the special order (5) |
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2 |
Incremental costs for the special order (5) |
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3 |
Incremental contribution margin from the special order (5) |
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4 |
Income statement including the effect of the special order (5) |
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Given the following information: |
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Q.2 |
Products |
A |
B |
C |
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P |
100 |
200 |
500 |
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V |
60 |
150 |
480 |
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Sales (Units) |
2000 |
3000 |
5000 |
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TFC |
400000 |
(to be allocated to products in proportion to sales value) |
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Instructions: |
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1.Prepare income statement (10) |
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2. Should any of the be dropped based on incremental analysis assuming fixed costs remain same? (5) |
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3. Income statement after implementing your decision based on your answer in part 2 (10) |
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Q.3 |
Joint Products |
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Units |
Per Unit |
$ |
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Joint or common costs prior to split off point |
500000 |
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(allocated to products in proportion to sales value at split off point) |
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Sales at split off point |
X |
500 |
100 |
50000 |
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Sales at split off point |
Y |
1000 |
200 |
200000 |
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Sales at split off point |
Z |
2000 |
300 |
600000 |
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Sales after further processing of |
X-->P |
400 |
500 |
200000 |
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Sales after further processing of |
Y-->Q |
800 |
500 |
400000 |
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Sales after further processing of |
Z-->R |
1600 |
700 |
1120000 |
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Further processing costs from |
X-->P |
200000 |
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Further processing costs from |
Y-->Q |
250000 |
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Further processing costs from |
Z-->R |
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300000 |
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Instructions: |
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Compute: |
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1 |
Incremental revenue, incremental costs and incremental contribution margin on further processing of each product (3x5) |
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2 |
Based on your computations in part1, which of the products be sold at spit off point and which be sold after processing (15) |
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3 |
Prepare income statement if your decision of part 2 is implemented (15) |
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4 |
Prepare income statement if all products are sold at split off point (15) |
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5 |
Prepare income statement if all products are sold after further processing (15) |
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