Cost and Management Accounting Assignment No

Accounting Dec 15, 2020

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

Q.1	Given the following information:
		Existing
		Units	Per Unit	$
	Production Capacity	15000
	Sales	1000	100	100000
	VC	1000	60	60000
	TCM	1000	40	40000
	Annual FC			20000
	Profit			20000

		Special Order
		Units	Per Unit	$
	Sales	5000	70	350000
	VC	5000	60	300000
	Material cost for adding Logo		2
	Cost of special equipment			2000
	(to be used only once)
	Annual fixed costs will remain unchanged
	Instructions:
	Compute:
1	Incremental revenue from the special order (5)
2	Incremental costs for the special order (5)
3	Incremental contribution margin from the special order (5)
4	Income statement including the effect of the special order (5)
	Given the following information:
Q.2	Products	A	B	C
	P	100	200	500
	V	60	150	480
	Sales (Units)	2000	3000	5000
	TFC	400000	(to be allocated to products in proportion to sales value)
	Instructions:
	1.Prepare income statement (10)
	2. Should any of the be dropped based on incremental analysis assuming fixed costs remain same? (5)
	3. Income statement after implementing your decision based on your answer in part 2 (10)
Q.3			Joint Products
			Units	Per Unit	$
	Joint or common costs prior to split off point				500000
	(allocated to products in proportion to sales value at split off point)
	Sales at split off point	X	500	100	50000
	Sales at split off point	Y	1000	200	200000
	Sales at split off point	Z	2000	300	600000
	Sales after further processing of	X-->P	400	500	200000
	Sales after further processing of	Y-->Q	800	500	400000
	Sales after further processing of	Z-->R	1600	700	1120000
	Further processing costs from	X-->P			200000
	Further processing costs from	Y-->Q			250000
	Further processing costs from	Z-->R			300000
	Instructions:
	Compute:
1	Incremental revenue, incremental costs and incremental contribution margin on further processing of each product (3x5)
2	Based on your computations in part1, which of the products be sold at spit off point and which be sold after processing (15)
3	Prepare income statement if your decision of part 2 is implemented (15)
4	Prepare income statement if all products are sold at split off point (15)
5	Prepare income statement if all products are sold after further processing (15)

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