管理会计复习提纲

PRACTICE QUESTIONS PART A, LECTURE 1

QUESTION 3Answer the five questions below which relate to the following data: A firm had the following per unit costs for a period in which it expected to produce 1,000 units: DM $20, DL $30, Variable OH $20, Fixed OH $10, Variable selling costs $5 per unit. Answer the following costs related to the data:

(a) Calculate the prime costs per unit.

(b) Calculate the conversion costs per unit.

(c) Calculate the product (inventoriable) cost per unit under absorption costing.

(d) Calculate the variable product (inventoriable) cost per unit under absorption costing.

(e) Calculate the period costs per unit.

(f) Calculate the total expected costs if the firm produced and sold 1,100 units. Answer

(a)Prime cost = DM + DL = $50 ($20 + $30)

(b)Conversion cost = DL + OH = $60 ($30 + $20 + $10)

(c)Product (inventoriable) cost under absorption costing = all manufacturing costs, i.e. $80 ($20 + $30 + $20 + $10)

(d)Variable product (inventoriable) cost under absorption costing = remove fixed OH of $10 per unit, therefore $70.

(e)Period cost = all costs that are not manufacturing costs. Here, only selling costs, therefore $5.

(f)Answer is $92,500, calculated as follows. Add total of expected manufacturing and

non-manufacturing costs. Note that the fixed and variable costs are treated differently:

SOLUTIONS TO PRACTICE QUESTIONS, PART A LECTURE 2

QUESTION 1

Production budget for the month of April

Required for sales 1,000

+ desired ending inventory 60 (5% x 1,200)

1,060

- opening inventory 52*

Required production 1,008

* If you did not know the actual inventory of products at the beginning of April (whether you do or not depends on how far in advance you are preparing the budgets), you would use the estimate for the beginning of April (which is the same as the end of March, i.e. 5% x 1,000 = 50).

Direct Materials purchases budget for the month of April (in kgs)

Required for production 2,016 (1,008 units x 2 kg)

+ desired ending inventory 200

2,216

- opening inventory 125**

Required purchases of material 2,091 kg

** As before, if you did not know the actual inventory of materials at the beginning of April, you would use the estimate for the beginning of April (which is the same as the end of March, i.e. 250 kg)

QUESTION 3

Flexible budget formula is $100,000 + $40 per unit, therefore with no changes, budgeted costs would be: $100,000 + (20,000 x $40)

= $900,000

The effect of using overtime is that the variable cost will be greater than $40 per unit. Without further information, all we can conclude is that the budgeted amount will be some amount greater than $900,000.

QUESTION 4

Av. CM = (.1 x $4) + (.7 x $6) + (.2 x $2)

= (.4 + 4.2 + .4) = $5

BE point = 6,000 = 1,200 units in total, which is:

5

120 units of product 1 (10%)

840 units of product 2 (70%)

240 units of product 3 (20%)

QUESTION 5

(a)Cost A is not fixed, as it changes across activity levels. Not variable, because it is a different amount per unit at the different activity levels. Therefore it is mixed.

Cost B is a fixed cost as in total it remains the same in total across different activity levels. Because Cost C is constant per unit across different activity levels, the total cost will vary in proportion to activity level, therefore it is a variable cost.

(b)High cost – low cost

High activity – low activity

$3,000-$2,000

2,000-1,000

= $1,000/1,000

= $1 per unit.