User Account

All Pages

Prepare a comparative total and per unit cost statement

Assignment Help Accounting Basics
Reference no: EM13259729

A manufacturer produces 7,500 units per month. Due toincrease in demand and consequent extension of delivery dates and dissatisfaction amongcustomers, the management decided to increase the output to 11,500 units per month in the nextyear (against anticipated demand of 14,500 units). Given below is the data of per unit costsand sales value on the basis of current production level of 7,500 units:

Rs. Rs.

Direct material 180

Direct labour 120

Fixed overhead (Rs.1,200,000) 160

Variable overhead 240 700

Selling and distribution expenses:

Fixed (Rs.480,000) 64

Variable 90 154

General administrative expenses (fixed Rs.1,440,000)192

Profit margin 30 222
Sales value 1,076

If the proposal to increase in output is adopted, thenfollowing changes are expected:

Additional capital outlay of Rs.3,600,000 would berequired on which financial charges would amount to 10% per annum.

There will be an increase of 25% in fixedoverheads.

An increase of 20% in fixed selling anddistribution expenses is expected.

10% increase in general administrative expenses isalso expected besides the financial charges.

In the coming year there will be an increase of 5%in different items of expenses, except fixed expenses irrespective of the productionlevel.

If it is decided to maintain the present level ofsales, an increase of 2% in sales price is possible and impact of this increase should be taken forthe level of production at 7,500 units per month.

Required:

Prepare a comparative (total and per unit) cost statementshowing anticipated margin of profit for the present output of 7,500 units and proposed output of11,500 units.

Reference no: EM13259729

Questions Cloud

Affirmative action refers to a policy : In your own words, discuss your point of view on affirmative action. Do you believe it is fair or does affirmative action create further discrimination?
Different classes of share capital : Discuss the type of company's and also explain the different classes of share capital? How they are shown in balance sheet?
Calculate the maximum magnitude of the induced emf : An automobile has a vertical antenna 1.30 m long. The automobile travels eastward at 65 km/h on a horizontal road, Calculate the maximum magnitude of the induced emf in the antenna
Case study of riley company : Riley Company authorized a $1,000,000, 10-year, 6% bond issue dated July 1, 2009, with annual interest to be paid each December 31. On July 1, 2009, the bonds were issued for $886,500. Riley Company has a December 31 year-end.
Prepare a comparative total and per unit cost statement : Prepare a comparative (total and per unit) cost statement showing anticipated margin of profit for the present output of 7,500 units and proposed output of11,500 units.
Difference between a branch and a department : What is the difference between a branch and a department ? whatare the essentials of branch accounts?
Explain the importance of a commitment : Explain the importance of a commitment to hacking in the hacking subculture. Describe how the commitment levels and motivations of black-hat, white-hat, and gray-hat hackers may differ from one another.
Question-gomez service company : Gomez Service Company has received $7,500 in cash for services rendered. What affect does this transaction have on the accounting equation?
Determine the z0 of the line and the phase velocity : The input impedance of a 31cm long lossless transmission line of unknown characteristic impedance was measured at 1 MHz. With the line terminated in a short circuit, the measurement yielded an input impedance equivalent

Reviews

Write a Review

Accounting Basics Questions & Answers

  Controlling accounts and subsidiary ledgers

What are controlling accounts and subsidiary ledgers? What is the relationship between them?

  Calculate the predetermined overhead allocation rate.

a. Calculate the predetermined overhead allocation rate. b. Calculate the overhead cost applied during the year.c. Determine the amount of over- or underapplied overhead.

  Amount of cash required to fund cash dividend

Gannon, Inc., had 100,000 shares of common stock outstanding. During the current year, the company distributed a 10 percent stock dividend and subsequently paid a $.50 per share cash dividend Calculate the number of shares outstanding at the time ..

  Lomax enterprises should recognize depreciation expense i

Lomax Enterprises purchased a depreciable asset for $27,500 on March 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset's salvage value is $3,100,

  How is tax basis calculated

What is the economic and tax policy rationale regarding corporate formation? When will a transfer be deemed a taxable event? How is basis determined? What if assets are contributed to a corporation by a non shareholder such as a government entity?

  Auditing general cash for the pittsburgh supply

Auditing general cash for the Pittsburgh Supply Company for the fiscal year ended July 31, 2009. The client has not prepared the July 31 bank reconciliation. After a brief discussion with the owner,

  Relationship between the financial statements

In what ways do the elements of the four financial statements interact with one another? How might changing one of the financial statements affect the other financial statements? Why is it essential to understand the relationship between the finan..

  Cost formula for utility expense

The high-low method will be used to develop a cost formula to predict 2011 utility charges, and the number of machine hours has been found to be an appropriate cost driver. Data for the first half of 2010 are not being considered because the utili..

  Find dollar amount reported preferred stock account balance

The stockholders' equity section of Kay Corporation at the end of thecurrent year showed. Calculate the dollar amount to be reported as the preferred stock account balance.

  Critical functions of real-world financial managers

Reading and understanding an organization's financial statements and accurately interpreting the information provided therein is an integral part of financial management. By analyzing and presenting on Arcadia Hospital's financial statements, stud..

  Noncontributory pension plan

Frank Clarke, an employee of Smithson Company, was covered under a noncontributory pension plan. Frank died on April 15 2010 at age 64 and pursuant to the plan, his widow received monthly pension payments of 500 beginning May 1 2010.

  Elburn company-accounts receivable

he ledger of Elburn Company at the end of the current year shows the following: If Elburn uses the direct write-off method to account for uncollected accounts, journalize the adjusting entry at December 31, assuming Elburn determines that Copp's $..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd