# Management accounting

Posted: August 12th, 2013

Management Accounting

Name:

Course:

Date:

Management Accounting

Question 1

a)         The manufacturing overhead cost per unit for the company’s two products under traditional costing system is calculated as:

Manufacturing Overhead Cost = Total Estimated Manufacturing Overhead Cost/Total        Labor Hours

= 1464480/24000

= RM 61.02 per hour

Thus, Manufacturing Overhead Cost

for product E100                          = Overhead Cost per unit X Direct Labor hours

= 61.02 X 0.40

= RM 24.41 per unit

Manufacturing Overhead Cost for

for product L200                          = 61.02 X 1.2

= RM 73.22 per unit

Total Manufacturing Overhead Cost

Per unit                                         = 24.41 + 73.22

= RM 97.63 per unit

b)         Calculating Manufacturing Overhead Cost per unit under Activity Based Costing involves:

i) Predetermined Overhead Rate = Estimated Overhead Cost/Estimated labor hours

= 1464480/24000

= RM 61.02 per hour

ii) Unit Product Cost

 E100 L200 Direct Materials Per Unit 10.20 50.50 Direct Labor Per Unit 8.40 25.20 Direct Labor-Hours Per Unit (61.02X0.4)=24.41 (61.02X1.20)=73.22 Total Unit Product Cost 43.01 148.92

iii) Activity Based Cost

 Total Cost Total Activity Activity Rate Activity Based Cost (E100) Activity Based Cost (L200) 552000 24000 23 276000 276000 132400 1104 119.93 103619.52 28783 780000 1560 500 300000 480000 Total Activity Based Cost 679619.52 784783

iv)  Manufacturing Overhead Cost per unit =Total ABC/Produced Units

E100 = 679619.52/30000 = RM 22.65 per unit

L200 = 784783/10000      = RM 78.48 per unit

Total Manufacturing Overhead Cost per unit = 22.65 + 78.48 = RM 101.13 per unit

Question 2

I) a)      Number of Units Sold in 2012, if national income = 125000, selling price per unit = RM 100, variable costs per unit = RM 70, fixed costs = RM 475000

Let Number of units sold = x

(Sales Revenue – Variable Cost) – Fixed Cost = National Income

(100x – 70x) – 475000 = 125000

30x – 475000 = 125000

30x = 125000 + 475000

X = 600000/30

= 20000 Units

b)         Number of Units sold if national income is increased by RM 60000

Let Number of units sold = y

(Sales Revenue – Variable Cost) – Fixed Cost = National Income

(100y – 70y) – 475000 = (125000 + 60000)

30y – 475000 = 185000

30y = 660000 + 475000

y = 600000/30

= 22000 Units

c)         Selling Price per unit if number of units sold in 2013 is same as 2012 and net income is increased by RM 60000

Number of units sold = 20000, national income = 185000

(Sales Revenue – Variable Cost) – Fixed Cost = National Income

(20000y – [70X20000]) – 475000 = 185000

20000y = 185000 + 475000 + 1400000

Y = 2060000/20000

= RM 103

II)        Units used in making component = 6000 units

 Per Unit Total Make Buy Make Buy Purchase Price 13 78000 Direct materials 5 35000 Direct Labor/hrs 2 15000 Variable OH 1 10000 Fixed OH 3 20000 Total 13 80000

Question 3

a)

 Direct labor budget Month July August September October Units to be produced 5000 7000 7500 8000 Direct Labor Time Per Unit in Hrs 1.3 1.3 1.3 1.3 Total Hrs Needed 6500 9100 9750 10400 Avg Wage per Hr Total Direct Labor Cost

b)

 Per Unit Total Make Buy Make Buy Purchase Price 13 78000 Direct materials 5 35000 Direct Labor/hrs 2 15000 Variable OH 1 10000 Fixed OH 3 20000 Total 13 80000

### Expert paper writers are just a few clicks away

Place an order in 3 easy steps. Takes less than 5 mins.

## Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
\$0.00