2.2. Traditional costing methods
A subsection of Accounting, 9706, through 2. Cost and management accounting (AS Level)
Listing 10 of 533 questions
A company manufactures three products: X, Y and Z. The table provides per unit information concerning the three products. per unit product X $ product Y $ product Z $ selling price 100.00 120.00 130.00 direct material cost 40.00 45.00 48.00 direct labour cost 20.00 25.50 29.00 variable overhead cost 15.00 18.00 20.00 fixed overhead cost 18.00 18.00 27.00 profit 7.00 13.50 6.00 All three products are made from the same material. If the material is in short supply, which manufacturing pattern will maximise profit?
9706_s23_qp_12
MCQ
2023
Paper 1, Variant 2
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K Limited is a manufacturing company which has recently changed from using absorption costing to using marginal costing. Explain two reasons why a manufacturing company might change from using absorption costing to using marginal costing. Additional information At one of K Limited’s factories a single type of product is manufactured. This month’s marginal cost statement is as follows: Marginal cost statement $ Sales revenue 660 000 Variable costs (462 000) Contribution 198 000 Fixed costs (95 000) Profit 103 000 Calculate the contribution to sales ratio. Calculate the break-even point in sales revenue. Additional information The directors require a target profit of $140 000 to be made next month. Calculate the sales revenue required to achieve the target profit. Additional information The directors are prepared to accept a special order with a negative contribution. State three reasons why a special order with a negative contribution might be accepted. Additional information At another factory of K Limited three different types of product are made. The following details are available. Aye Bee Cee Selling price per unit $35 $43 $28 Maximum monthly demand per product 2400 units 3200 units 1800 units Materials used per unit 6 kg 8 kg 4 kg Labour cost per unit $12 $14 $10 Materials cost $1.50 per kg. Only 35 000 kg of material are forecast to be available in January 2025. Forecast fixed costs are $63 000 per month. Calculate the optimum profit to be made in January 2025. Additional information A director has found an overseas supplier of materials who is prepared to make up the shortfall in materials. The supplier will charge $2.60 per kg and there will be a delivery charge of $8000. Calculate the additional profit to be made if the shortfall in materials is made up by the overseas supplier. Advise the directors whether or not they should purchase the shortfall in materials from the overseas supplier. Justify your answer, considering both advantages and disadvantages.
9706_s24_qp_21
THEORY
2024
Paper 2, Variant 1
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Questions Discovered
533