# HI5017 Managerial Accounting Assignment Help

## Question 2 – Week 3 (7 marks)

1. Total manufacturing cost for 150 Coffee table
 Job No. X10 Direct materials used 22,800 Direct Labour used (600 *16) 9,600 Applied Factory Overhead (30*400) 12,000 Total manufacturing cost for Job No. X10 44,400
1. b) Calculate the cost per coffee table for Job No. X10?
 Total manufacturing cost for Job No. X10 (A ) 44,400 Number of Coffee Table ( B ) 150 Cost Per Coffee Table (A/B) 296
1. c) List two uses of this unit cost information to the managers at Tik Tok Company.
• Company can determine break even point  and level of profit.
• Per unit cost helps in determining key cost drivers which increase overall cost of production.

## Question 2 – Week 5

1. Calculations for activity rates for each of the overhead items
 Activity Cost Pools Cost Drivers Estimated Overhead (A ) Expected Use of Cost Drivers ( B ) Activity Rate (A/B) Purchasing Number of orders 1,200,000 40,000 30 Per Order Machine setups Number of setups 900,000 18,000 50 Per Setup Machining Machine hours 4,800,000 120,000 40 Per Machine Hour Quality Control Number of inspections 700,000 28,000 25 Per Inspection

Here is the calculations showing activity rates for overhead items. For purchasing activity the rate is \$30 per order, For Machine setups and Machining \$50 per set up and \$40 per Machine hours respectively. Quality control costs \$25 per inspection.

• Using the rates in (1) determine the unit cost for TRI-X.
 Calculation of Overheads applied Activity Cost Pools Activity Rate (A ) TRI-X Product ( B ) Applied Overheads (A*B) Purchasing 30 17,000 510,000 Machine setups 50 5,000 250,000 Machining 40 75,000 3,000,000 Quality Control 25 11,000 275,000 Total Overheads applied (A ) 4,035,000 Number of Units manufactured ( B) 26,000 Overhead Unit Cost (A/B) 155.19
 Direct Materials 700 Direct Labour (\$20/hour) 120 Overheads applied 155.19 Total Unit Cost of TRI-X 975.19
1. Calculate the Gross Profit  on the Product TRI-X
 Selling Price Per Unit 1600 Less Unit Cost 975.19 Gross Profit Per Unit 624.81

The selling price of TRI-X  in the market is \$1600 per unit , as per the cost drivers and activity costs the total unit cost will be \$975.19  which means  gross profit from the sale of goods  will be \$624.8.

## Question 3 – Week 6

1. Cash receipt budget schedule , include total receipts per month
 Cash Receipt Budget Particulars July August September Total Total Sales (A) 140,000 210,000 280,000 630,000 Immediately Collected ( A *15% ) =( B ) 21,000 31,500 42,000 94,500 Less Cash Discount (B* 4%) 840 1,260 1,680 3,780 Cash Collected from Immediate  (B – C ) =(D ) 20,160 30,240 40,320 90,720 One month later (A *25%) = ( E ) 35,000 52,500 87,500 Two months later ( A *40%) = ( F ) 56,000 56,000 Total  Receipts (D +E +F) 20,160 65,240 148,820 234,220

Working Note

 Sales Budget Particulars July August September Total Number of Units Sold 1,000 1,500 2,000 4,500 Selling Price Per Unit 140 140 140 140 Total Sales 140,000 210,000 280,000 630,000
1. Prepare a material purchases budget schedule for each of the first three
 Material Purchases  Budget Particulars July August September Total October Budgeted Production 1,450 1,650 2,120 5,220 2,460 Add Ending Inventory @20% of next month 330 424 492 492 Total Requirements 1,780 2,074 2,612 6,466 Less Beginning Inventory – 330 424 – Number of Units to be Purchased 1,780 1,744 2,188 5,712 Direct Material Cost Per Unit 60 60 60 60 Total Direct Material purchased 106,800 104,640 131,280 342,720

Working Note

 Schedule of Payment of Material Budget Particulars July August September Total Total Direct Material purchased 106,800 104,640 131,280 342,720 Payment made in the following month 106,800 104,640 211,440 Total Payments made for Purchases – 106,800 104,640 211,440
1. a cash budget for the month of July. Include the owners’ cash
 Cash Budget Particulars July August September Total Opening Balance 250,000 194,810 52,650 250,000 Total Receipts 20,160 65,240 148,820 234,220 Total Cash Available ( A ) 270,160 260,050 201,470 484,220 Less Payments Material – 106,800 104,640 211,440 Labour 14,500 16,500 21,200 52,200 Variable Overheads 18,850 31,600 39,110 89,560 Fixed Overheads 42,000 52,500 52,500 147,000 Total Payments ( B ) 75,350 207,400 217,450 500,200 Ending Balance (A -B) 194,810 52,650 -15,980 -15,980

## Question 2 – Week 8

1. a) Using the general rule, determine the minimum transfer price.

When any manufacturing concerns are having factory outlets in more than one places  then they can transfer goods from one outlet to another  at transfer pricing. That transfer pricing  is the sum of  variable manufacturing costs and shipping cost and opportunity costs associated to the product. The calculation of transfer pricing are as follows:

= \$3.00 + \$0.20 + \$0.50 (\$4.00-\$3.50)

= \$ 3.70

1. b) Assume the Bottle Division has no excess capacity and can sell everything produced externally. Would the transfer price change?

When Bottle division consume  everything from the external sources then  transfer pricing would change  as goods generated internally and goods purchased from external channels have different costs  and vary  a lot.

1. c) Assume the Bottle Division has no excess capacity and can sell everything produced externally. What is the maximum amount Perfume Division would be willing to pay for the bottles?

If Perfume division is going to purchase goods from bottle division which  sells products externally produced then Perfume division has to pay \$4.00  per unit. As it is consuming goods which is produced externally not within same organisation.

1. d) When is it more appropriate to use market-based transfer price rather than cost-based transfer price?

If there are two options cost based transfer price and market based transfer price, then market based transfer pricing is most simplest and elegant method. Company can earn highest possible profit rather than abnormal profit as per the regular  or mandate pricing schemes.

## Question 3 – Week 10

 Particular Alpha Beta Gama Total Selling Price Per Unit 250 400 1500 (-)  Variable cost Per Unit 80 200 800 Contribution margin per unit 170 200 700 Sales Units 12000 6000 2000 20000 Contribution margin 2040000 1200000 1400000 4640000 a. Weighted average contribution Margin 232 b. BEP 21551.72 c. Margin of safety 24999

Working Note

Contribution Margin = Total contribution margin of Sales mix/ Number of sales units

 Break Even Point Fixed cost/Contribution Margin per unit Margin of Safety Actual Sales- Break Even / Actual sales Projected Sales 25000 Total Annual Fixed Costs 5,000,000

## Question 3 – Week 11

 Particulars 80000 units For overseas selling Price (10000 units) 90000 units Direct Material 57 57 Direct Labour 60 60 Variable Manufacturing Overhead 16 16 Fixed Manufacturing Overhead 30 30 Variable Selling and Administrative Costs 10.2 19.2 Fixed Selling and Administrative Cost 27 27 Import and Other Duties Cost 4.2 Total Unit Cost 200.2 213.4 Total Cost 16016000 2134000 18150000 Selling Price 240 242.6 Selling Unit 80000 10000 90000 Total Sales 19200000 2426000 21626000 Profit 3184000 292000 3476000

Estimation of profit on the basis of 80000 units produced

Profit Percentage = 20

Profit For 10000 units = 42.68

1. (b) Cost for selling damaged goods

There are 200 units of finished goods remaining as inventory with the company from last two months. The goods are now damaged due to environment and natural conditions, now if the company wants to sale them in market. Now, these goods are considered as damaged goods.  The feasible approach  for deciding  the selling price of the goods is the price offered by  market or cost of manufacturing  whichever is high.

1. (c) “All future costs are relevant in decision making.” Do you agree? Explain.

Future costs are pre decided costs for transactions in present time period. Yes, these costs are relevant for decision making. If any contract  between  parties are formed related to future transactions then it is good if in the contract future costs should involved because costs are changing with the pass of time and if future contracts are based on traditional pricing then no party will gain profit.  For recovery of cost and generating  profit , it is good  for making  contracts  on the basis of future cost.

#### References:

Accounting Tools. (2020). Transfer Pricing. Accountingtools.com [online]. Available at: https://www.accountingtools.com/articles/2017/5/16/transfer-pricing. [Accessed on 06.10.2020].