2. Cost and management accounting (AS Level)
A section of Accounting, 9706
Listing 10 of 903 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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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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For Examiner's Use Clarke Limited manufactures one product, the Apex. The following forecast information for the Apex is available for the year ending 31 December 2014: Per unit: Selling price $45.50 Direct material ($4 per metre) $14.00 Direct labour ($12 per hour) $18.00 Variable production overhead $ 3.00 Sales demand 4 000 units Fixed overheads are forecast to be $23 100 for the year. REQUIRED Calculate the breakeven point in units for the sales of the Apex. Calculate the margin of safety for the Apex in terms of revenue. For Examiner's Use Clarke Limited has decided to introduce two new products in addition to the Apex; the Bond and the Cord. Both products use the same direct material and the same grade of direct labour as the Apex. The following forecast information is available for the year ending 31 December 2014: Per unit: Bond Cord Selling price $52.00 $67.50 Direct material ($4 per metre) $16.00 $20.00 Direct labour ($12 per hour) $24.00 $30.00 Variable production overhead $ 4.00 $ 5.00 Sales demand 6 000 units 2 000 units Fixed overheads are expected to double as a result of producing all three products. REQUIRED Calculate the contribution per unit of the Bond and the Cord. Calculate the total quantity of direct material required by Clarke Limited for the year ending 31 December 2014. Clarke Limited has been told that due to a shortage of direct material, only 40 000 metres will be available for the year. Calculate the maximum forecast profit for Clarke Limited for the year ending 31 December 2014 using 40 000 metres of direct material. For Examiner's Use Explain why profit calculated using marginal costing would be different to that calculated using absorption costing.
9706_s13_qp_22
THEORY
2013
Paper 2, Variant 2
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Bould Limited manufactures two products, Wye and Zed. The forecast data for the year ending 30 June 2016 is as follows. Wye Zed $ $ Revenue from Wye – 70 000 units at $12 840 000 Revenue from Zed – 90 000 units at $8 720 000 Materials (259 000) (180 000) Labour (233 000) (372 000) Overheads (190 000) (207 000) Profit / (Loss) 158 000 (39 000) Labour includes fixed costs 65 000 48 000 Overheads include fixed costs 36 000 45 000 REQUIRED Calculate the contribution per unit of Wye. Calculate the contribution per unit of Zed. Calculate the break-even point in units of Zed. Calculate the break-even point in revenue of Zed. Calculate the margin of safety in revenue for Zed. Additional information The directors are concerned about the forecast loss of manufacturing Zed and are considering two proposals. Proposal 1 Increase the selling price of Zed by $1.20 per unit. The sales volume is expected to fall by 5% as a result. Proposal 2 Stop manufacturing Zed. This will incur redundancy costs of $20 000. There would be an increased additional budget facility for advertising Wye, which would increase sales volume of Wye by 40%. REQUIRED Calculate the revised forecast profit of Bould Limited for the year ended 30 June 2016 if proposal 1 is adopted. Calculate the revised forecast profit if proposal 2 is adopted. Advise, with reasons, which proposal the directors should adopt. Proposal Evaluation
9706_s15_qp_21
THEORY
2015
Paper 2, Variant 1
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Questions Discovered
903