2. Cost and management accounting (AS Level)
A section of Accounting, 9706
Listing 10 of 903 questions
Mandeep owns two manufacturing businesses. REQUIRED State what is meant by: Variable costs Fixed costs Semi-variable costs Additional information One of Mandeep’s businesses manufactures three products, Ess, Tee and Ewe. The following monthly budgeted information is available for December 2022. Per unit Ess Tee Ewe Selling price $90 $105 $150 Contribution $41.50 $45.00 $55.20 Maximum monthly demand 80 units 50 units 75 units Budgeted fixed overheads are absorbed at $14 per unit based on maximum monthly demand. REQUIRED Calculate the total maximum contribution and also total maximum profit that Mandeep can earn in December 2022. Additional information The business uses the same material to manufacture Ess, Tee and Ewe. The following information is available for direct material. Per unit Ess Tee Ewe Direct material ($6 per metre) 5 metres 6 metres 8 metres REQUIRED Calculate the total material (in metres) required to meet the maximum demand in December 2022. Additional information Mandeep has been told that due to a national shortage of material, he will only be able to obtain 1000 metres of material each month for the next three months. REQUIRED Prepare a statement to show the maximum contribution and also maximum profit that Mandeep can earn in December 2022 taking account of the shortage of material. Additional information Mandeep made enquiries and found an overseas supplier who would be able to provide enough material to meet his requirements each month. Mandeep has never used this supplier before. He has been assured that the material will be of a similar quality to his current supply and that the price would be $5 per metre. REQUIRED Advise Mandeep whether or not he should purchase all future supplies of material from the overseas supplier. Justify your answer. Additional information Mandeep is currently preparing budgets for his other business for the next year. He operates a system of absorption costing and provides the following information for one unit of product. Direct material 6 kg at $4.80 per kg Direct labour Machining department 2 hours at $9 per hour Assembly department 3 hours at $8 per hour Overheads Machining department 2 direct labour hours 3 machine hours Assembly department 3 direct labour hours 0.5 machine hours Overhead absorption rates Machining department $6.75 per machine hour Assembly department $4.60 per direct labour hour REQUIRED Calculate the price per unit that Mandeep should charge customers in order to obtain a 20% profit margin. State three benefits to a business of preparing budgets. State two limitations of budgetary control.
9706_w22_qp_21
THEORY
2022
Paper 2, Variant 1
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Questions Discovered
903