Reference no: EM131415468
Task 1:
Half-crown & Co. produces one type of product with the following costs and revenues for the year:
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$
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Total sales
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3 125 000
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Total fixed costs
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1 000 000
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Total variable costs
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1 875 000
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Total units produced and sold 312 500.
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Required:
(a) How many units must be produced and sold to break-even?
(b) Calculate the margin of safety as a percentage.
(c) Determine the expected profit or loss if selling price decreases by 10% and all other cost and revenue relationships remain the same.
(d) Determine the expected profit or loss if sales volume decreases by 10% and all other cost and revenue relationships remain the same.
(e) If fixed costs increase by 10% and all other cost and revenue relationships remain the same, determine the expected net profit or loss.
Task 2
The Just Right Company produces a single product with the following standard costper unit:
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Direct material
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2 kg @ $12 = 24
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Direct labour
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5 hours @ $9 = 45
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Overhead 5 hours @ $$
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20
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Total standard unit cost
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$89
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Overhead is applied based on units produced ($20 per unit).
The overhead rate for the year was determined based on the following data:
Fixed overhead $250,000
Expected output 50,000 units.
Actual data for the year was as follows:
- 100,000 kg of raw materials purchased at $12.20 per kg.
- Direct labor rate paid was $9.10 per hour
- Actual direct labour hours 190,000 hours
- Good units finished were 40,000 units
- Actual direct material used was 90,000 kg
- fixed overhead incurred was $280,000
Required:
- Direct material price variance
- Direct material quantity variance
- Direct labour rate variance
- Direct labour efficiency variance
- Overheadspending variance
- OverheadEfficiency variance:
- Overhead Volume variance:
Task 3:
Discuss the meaning of double entry accounting; also explain the difference between cash accounting and accrual accounting.
ASSESSMENT TASK: knowledge gathering activities
Task 1
Discuss the differences between manual and computerised systems when entering final transactions. (1.1)
Task 2
It is very important to code the data systematically. Keeping this in mind, match the following terms with the correct description. An example has been given. (1.2)
1. Organising information using a specific subject or heading as the indexing unit.
2. A system that stores and provides the data or information relating to the organisation's operational performance and decision-making processes.
3. Organising information in date order.
4. Organising information using a combination of letters and numbers.
5. Organising information using a specific word from the information as the indexing unit.
6. A system in which information is stored in the correct places, is accessible to the correct people, and is presented in user-friendly format.
7. Consist of hard copy materials, filing cabinets etc.
8. Organising information using a file number or code.
9. Information/ files that are not currently in need.
10. Consist of hardware, software and people.
Task 3
Discuss the importance of presenting budgets and reports in a clear manner that they conform to management information requirements
Task 4
Consider an example of a new car sale yard.Managers predicted that they would sell 1,400 of model A and 1,800 of model B in the fiscal year. They would prepare their budget accordingly. Sales of model A did not meet expectations and sold 1,200 units. Model B had sales rise to 2,400 vehicles for the year. The expected margin on each vehicle is $2,000 for model A and $3,000 for model B. (4.2)
Calculate the predicted and actual sales mix and the impact of the variations on income.
Task 5
Discuss the importance of data reconciliation. Also, discuss what is involved in interpreting revenue and cost?
Task 6
Suppose you work as an accountant with an accounting firm. One client (who runs a small business) came to discuss about accounting information system and budgeting requirements. Consider your trainer as that client.
Do a five minutes meeting with your trainer to identify client requirements. You may ask following questions:
1. What kind of business you have? Size and structure.
2. Which accounting system are you using?
3. Which are major cost of your business
4. Which budgets you want me to prepare for your business?
5. For how long you want to prepare your budgets, quarterly or monthly etc.?