Escolar Documentos
Profissional Documentos
Cultura Documentos
A
high
low
difference
at
B
a
X
b
total costs
mach costs
94,581
141,852
47,271
labour
1,050
1,380
330
intercept:
(55,827)
1,600
slope
143.25 1/2 mark
155.17
1600
(70,207)
178,065
strong correlation
0.5 mark
89.63% of the variation in Y is explained by X; or
can rely on the formula, provided it is econ. 0.5 mark
1 mark each
1 mark each
1 mark each
1 mark each
1 mark each
QUESTION 2
Work in process
number of units
% completion - Materials
% completion - Conversion
Cost of Materials in WIP
Cost of Conversion in WIP
New units started during year:
Costs incurred during the year:
Costs incurred during the year:
FIFO
% to complete
Equivalent Units
2,000
% complete
Equivalent Units
4,800
Ending WIP
% complete
(started and not completedEquivalent Units
1,200
8,000
Ending WIP
1,200
80%
80%
?
?
Materials:
Conversion Costs:
physical
units
2,000
6,000
8,000
Open WIP
Started
units to account for
units accounted for as:
Opening WIP
(now complete)
Opening WIP
2,000
90%
40%
$ 25,000
$ 30,000
$
$
Material
equiv units
10%
200
Conversion
equiv units
1/2 mark
60%
1,200
1/2 mark
100%
4,800
1/2 mark
100%
4,800
1/2 mark
80%
960
1/2 mark
80%
960
1/2 mark
5,960
Material
Cost
$
25,000
28,000
53,000
Opening WIP
Costs added
costs to account for
6,000 units
28,000
27,000
6,960
Conversion
Total
Cost
Cost
$
30,000 $ 55,000
27,000
55,000
57,000
110,000
Allocation of Costs:
Costs added
Equiv Units
cost/EU
28,000
5,960
4.70 1 mark
27,000
55,000
6,960
3.88 1 mark
Opening WIP
25,000
30,000
200
4.70
940
1,200
3.88
4,655
25,940
34,655
60,595
1/2 mark
4,800
4.70
22,550
4,800
3.88
18,621
41,171
1/2 mark
960
4.70
4,510
960
3.88
3,724
53,000
57,000
110,000
48,490
4,510
53,000
53,276
3,724
57,000
101,766
8,234
110,000
current period:
EU
cost/EU
current period cost
EU
cost/EU
total cost
8,234 1 mark
QUESTION 3
Beg. Of Year End of Year
Raw Material Inventory
20
Work-in-Progress Inventory
40
20
Finished Goods Inventory
20
10
Budget
350
100
70
170
Overhead
Machine Hours (in hrs)
Direct Labour Costs
Material Purchases
Actual
340
90
90
180
ending
O/H Rate =
actual hours
Man O/H
actual
Overhead
340
40
90
160
315
1/2 mark
1/2 mark
20
Finished Goods
20
585
595 COGS
ending
10
opening
COGM
1/2 mark
1/2 mark
B: COGM
COGM is
585
1 mark
1 mark
x under
0.40
0.80
23.80
25.00
1 mark
E. NORMAL COSTING:
makes it easier to bid on new jobs
1 Mark
Normal costing will result in an overhead rate that is more uniform and realistic for all of the u
Recognized by GAAP
Provides managers with needed information in a timely manner
any other reasonable answer
F. PRORATION
Pro:
more accurate
any other reasonable answer
1/2 mark
Con
1/2 mark
often immaterial
any other reasonable answer
less accurate
1/2 mark
not appropriate if big balance in WIP or Finished goods at end of period
any other reasonable answer
QUESTION 4
Rolling Stock
Rail Charges
Rail Fuel
Rail Yard
Salaries
PART A
total
4,000,000
1,000,000
3,000,000
3,000,000
4,000,000
15,000,000
km travelled
# containters:
total cost
Single cost ratetotal distanace
cost/km
distance
rate
Total
200,000 km
5,000 containers
15,000,000
200,000
75 1 mark
Customer A
Customer B
20
4,000
75
75
1,500
300,000
1/2 mark each 1/2 mark each
PART B
Likely to be underbidding on jobs that are short distance
Likely to be overbidding on jobs that are long distance
OR
Likely to be underbidding on jobs with lots of containers
Likely to be overbidding on jobs that have few containers
PART C
Rolling Stock
Rail Charges
Rail Fuel
Rail Yard
Salaries
total cost
total
4,000,000
1,000,000
3,000,000
3,000,000
4,000,000
15,000,000
cost driver
allocated to:
rail
4,000,000
1,000,000
3,000,000
allocated to:
loading
1/2 mark
1/2 mark
1/2 mark
3,000,000 1/2 mark
2,000,000
2,000,000 1/2 mark each
10,000,000
5,000,000
2 marks
1 mark
distance
containers
200,000
5,000
50
per km
1/2 mark
distance
rate
sub total
containers
rate
sub total
TOTAL
1,000
per container
1/2 mark
Customer A
Customer B
20
4,000
50
50
1,000
200,000
1
1,000
1,000
###
1,000
1,000
2,000
201,000
1/2 mark
1/2 mark
QUESTION 5
Container size (L x W x H)
Selling Price
Variable cost per container
allocated fixed costs per container
Profit per container
Mini
Standard
Long
7.5 x 8 x 8
20 x 8 x 8
60 x 8 x 8
$400
180
100
$120
Mini
Demand (containers):
31
8
3.88
$900
300
350
$250
Standard
$2,100
400
400
$1,300
Long
17
3
5.67
5
1
5.00
Mini
7.5
x 8 x Standard
8 20 x 8 x 8
size
400
900
price
180
300
VC
220
600
CM
7.5
20
length (constraint)
CM per constraint
29.33
30
1 mark for removing Fixed costs from calculation
1 mark for calculating CM per unit of contraint
Long
55 x 8 x 8
2100
400
1700
60
28.33
available
less: standard
available
less: mini
available
less: long
Optimal is:
containers /
railcar
17
31
1
Mini
31
railcars
10.0
5.7
4.3
3.9
0.5
Standard
17
Long
0
2 marks
14.54
2 marks
2 marks
Therefore should load them in this order: 1st standard, 2nd mini, 3rd long
containers
Total
max CM
$17,020
BONUS - 1 mark
Using CM per unit of contraint will leave some space unused
and will generate total CM of:
Mini
Standard
Long
total
CM unit
220
600
1700
units
31
17
0
total
6820
10200
0 $ 17,020
size (feet)
total (feet)
7.5
232.5
20
340
60
0
572.5
7.5
217.5
Mini
20
320
CM unit
units
total
220
24
5280
Standard
600
15
9000
size (feet)
total (feet)
7.5
180
20
300
60
60
597.5
Long
total
1700
2
3400 $ 17,680
60
120
600