Reference no: EM133021561
Questions -
a) Calculating the full (absorbed) cost of a product requires several steps. List, with an explanation, the correct sequence that the following activities should be completed in order to correctly calculate the full cost of a product:
Calculate the overhead absorption rate
Apportion the fixed costs across cost centers
Select and justify a reasonable method of apportionment
Re-apportion costs from service centers such as administration or the canteen
Apply the overheads to products via the absorption rate
b) ABC Limited started producing and selling its first and only product, The Alpha on 1 January 20X2. It has the following information:
Sales in January were 900,000 units, and these doubled in every subsequent month
Production was planned to be 2,100,000 units every month, and the plan was achieved in full
Each Alpha has £12 of raw materials, £4 of power and £6 of other variable costs
Each Alpha sells for £30
There were fixed production costs of £4,200,000 each month, and other fixed costs which were non-production and not to be absorbed into products of £2,000,000
Calculate the profit of the company month by month and in total for the quarter using absorption costing and then marginal costing. Explain the difference in profit for each month.
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What is the total of fixed costs
: A break-even chart shows maximum unit sales at 5,000 at 100 each, maximum profit of 1000,000, What is the total of fixed costs
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Calculate the required rate of return on a security
: The risk-free rate is 6% and the expected rate of return on the market portfolio is 13%. Calculate the required rate of return on a security
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What is your best guess as to the rate of return
: If the market return this year turns out to be 8 percentage points below expectations, what is your best guess as to the rate of return on the stock
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Record a journal entry for the original transaction
: For the transactions above, record a journal entry for the original transaction and record the required year-end adjustment
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Calculate the profit of the company month by month
: Calculate the profit of the company month by month and in total for the quarter using absorption costing and then marginal costing
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Determine the amount of dividends
: Determine the amount of dividends that was paid each year (2015-2019) for the preference shareholders and ordinary shareholders
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Determine the earnings per share on common stock
: Income before income tax was $342,000, and income taxes were $50,800 for the current year. Determine the earnings per share on common stock
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What price will the company charge
: What price will the company charge if the firm uses cost-plus pricing based on total variable cost and a markup percentage of 150%
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How many units were completed and transferred
: Department 2 had 4000 units, which were 20 percent are to conversion costs. How many units were completed and transferred from Department 2
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