2.2. Traditional costing methods
A subsection of Accounting, 9706, through 2. Cost and management accounting (AS Level)
Listing 10 of 533 questions
Ventana Ltd produce three different types of slatted wooden blinds, Pine, Teak and Oak. The company’s forecast figures for the year ended 30 April 2012 were: Pine Teak Oak $ $ $ Selling price (per unit) Costs (per unit) Direct material Direct labour Variable overhead Fixed overhead is absorbed on the basis of 50% of direct material cost. Annual production and sales are forecast to be: Pine 2000 units Teak 1600 units Oak 1000 units REQUIRED For the year ended 30 April 2012: Prepare a statement to show the contribution per unit for each product. Calculate the total forecast fixed cost for the year. Prepare a statement to show the break-even point for each type of blind in units and dollars. Prepare a statement, using the contribution per unit, to show the total profit or loss made by each type of blind for the year. One of the directors wishes to stop production of the pine blinds. This would increase the total forecast fixed costs by 25%. However, the director estimates that sales of the teak and the oak blinds would increase by 50%. REQUIRED Prepare a detailed marginal cost statement, using the contribution per unit, to show the effect on total profit of stopping production of the pine blinds.
9706_s11_qp_22
THEORY
2011
Paper 2, Variant 2
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Paul owns two car wash businesses, called City Centre Car Wash and Suburban Car Wash. City Centre Car Wash has the following monthly costs: Per car $ Detergent 1.00 Electricity 0.50 Water costs 0.05 Wage costs 1.25 Per month $ Insurance of site Lease of equipment Manager’s salary Additional information: Both car wash businesses are open for 400 hours every month. The cars are washed one at a time. The average time taken to wash each car is 10 minutes. City Centre Car Wash is currently operating at 80% capacity and Suburban Car Wash at 70% capacity. REQUIRED For City Centre Car Wash, calculate the following correct to two decimal places: the total number of cars washed per month the total variable operating cost per month the total operating cost per month the average cost per car wash the price to be charged per car to give a profit margin of 20% the total profit per month. Using the price calculated in –above, calculate the following for City Centre Car Wash, correct to two decimal places: the contribution per car (per unit) the break-even point in units the margin of safety, in dollars, when operating at 80% capacity the margin of safety, in dollars, if operating efficiency falls to 60% capacity the contribution/sales (C/S) ratio when operating at 80% capacity. Suburban Car Wash charges the same price as City Centre Car Wash. At that price Suburban Car Wash shows a contribution to sales (C/S) ratio of 40%. Fixed costs are $3240. REQUIRED Calculate, for Suburban Car Wash the break-even point in units and in dollars the total monthly profit when operating at 70% capacity.
9706_s11_qp_23
THEORY
2011
Paper 2, Variant 3
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For Examiner's Use Blue Skies Ltd manufactures three types of tent: Beach, Explorer and Family. The company provides the following forecast data for the year ending 30 April 2013: Beach Explorer Family Forecast demand 30 000 40 000 24 000 Per Unit $ $ $ Selling price Raw materials Direct labour Variable overhead The same waterproof material is used in the manufacture of each tent. The cost of material is estimated to be $6 per square metre. Fixed costs for the year ending 30 April 2013 are estimated to be $3 500 000. . REQUIRED Calculate the unit contribution for each product. For Examiner's Use Calculate the total contribution and profit for the year based on forecast demand. There is only one supplier capable of producing waterproof tent material of the required quality. They have informed Blue Skies Ltd that the maximum amount they can supply in the year will be 546 000 square metres. REQUIRED Calculate the contribution per square metre for each product produced. For Examiner's Use Using the quantity of material that is available for production, calculate the number of each type of tent that should be produced so that total profit is maximised. Using the quantity of material that is available, prepare a marginal cost profit statement. Clearly show the contribution made by each type of tent and the total profit made in the year. For Examiner's Use The directors determine that at least 27 000 units of the Beach tent have to be produced in the coming year. Prepare a revised marginal cost statement to show the contribution made by each type of tent and total profit made in the year.
9706_s12_qp_21
THEORY
2012
Paper 2, Variant 1
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Questions Discovered
533