The abnormal gain is valued at its full process cost... c A mixed or semi-variable cost is one that is partly fixed and partly variable in behaviour.. An example would be power costs gas
Trang 1Answers
Trang 3Part 1 Examination – Paper 1.2
Section A
10 B
11 A
12 B
13 A
14 C
15 C
16 B
17 A
18 B
19 D
20 D
21 C
22 A
23 D
24 C
25 D
Total value of issues = 3,000 + 5,200 + 7,800 = £16,000
(9,250 – 6,750) ÷ (5,000 – 3,000) = £1·25
£
Standard cost of actual production (8,500 x 15) 127,500
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Trang 49 D
4,250 F Rate Actual hours at standard rate (9,200 x 12·50) 115,000
5,250 A Efficiency Standard hours for actual production at
10 B
£
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11 A
£
Completion of opening WIP (300 x 0·40 x 10) 1,200
Units started and completed in the month
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12 B
∑y = 17,500 + 19,500 + 20,500 + 18,500 + 17,000 = 93,000
∑x = 300 + 360 + 400 + 320 + 280 = 1,660
a = (93,000 ÷ 5) – 29·53(1,660 ÷ 5) = 8,796·04
13 A
£
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14 C
Maximum usage x Longest lead time = 520 x 15 = 7,800
15 C
Less Increase in stock at fixed overhead cost per unit
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17 A
18 B
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Trang 519 D
£
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20 D
21 C
Profits maximised when Marginal revenue (MR) = Marginal cost (MC)
MR = 40 – 0·06Q
MC = 10
MR = MC Therefore 10 = 40 – 0·06Q
Q = 30 ÷ 0·6 = 500 Price (P) = 40 – 0·03(500) = 25
22 A
Profit = Total revenue (TR) – Total cost (TC)
When P = 31 then 31 = 40 – 0·03Q and Q = 300
£
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23 D
CPU = £27
Contribution to sales ratio = 45%
Selling price = 27 ÷ 0·45 = £60
Margin of safety in units = 13,500 ÷ 60 = 225
Break-even point (BEP) = 1,000 – 225 = 775 units
At BEP: total contribution = total fixed costs
Total fixed costs = 775 x 27 = £20,925
24 C
25 D
P = 95,000 + 0·4X + 0·3Y
X = 46,000 + 0·1Y
Y = 30,000 + 0·2X
X = 46,000 + 0·1(30,000 + 0·2X) = 46,000 + 3,000 + 0·02X 0·98X = 49,000 and X = 50,000
Y = 30,000 + 0·2(50,000) = 40,000
P = 95,000 + 0·4(50,000) + 0·3(40,000) = 127,000
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Trang 6Section B
Raw materials input 80,000 158,800 Joint products (W1)
Cost per equivalent litre (EL):
Materials and conversion
EL
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£
Less: Normal loss (scrap value) (3,000)
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288,800 ––––––––
Cost per equivalent litre:
Workings:
£/litre processing realisable (ratio 3:2) value of
Total joint production cost (A + B) = 74,500 litres at £3·80 = £283,100
Apportioned A:B in the ratio 268,200:268,200 (= 1:1)
Product A = £141,550 and Product B = £141,550
W2 5% of 80,000 = 4,000 litres at 75p per litre = £3,000
W3 5,500 – 4,000 = 1,500 litres at £3·80 per litre = £5,700
(b) An abnormal gain occurs when the actual loss is less than the normal loss expected In other words the actual output of good production is higher than would normally be expected from the given level of input
The abnormal gain is shown as a debit entry in the process account
The abnormal gain is valued at its full process cost
2 (a) Calculations for the current year:
(i) Contribution per unit £50 x (75 ÷ 25) = £150
£’000
(ii) Total contribution (5,000 x £150) 750
Less Total fixed costs (5,000 x £70) (350)
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(b) Calculations for next year:
£/unit Selling price 50 x (100 ÷ 25) x 1·08 216
Less Variable cost (50 x 1·12) (56)
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Trang 7(c) A mixed or semi-variable cost is one that is partly fixed and partly variable in behaviour An example would be power costs (gas or electricity, for instance) which consist of a fixed charge irrespective of the number of units of power consumed and a variable charge based on the number of units of power consumed
For cost-volume-profit analysis the fixed and variable elements need to be separately identified by using, for example, the high low method or linear regression Each would then be considered along with the other variable and other fixed costs in the analysis
3 (a) Sales variances:
£ Actual sales units at actual selling price 678,500
Actual sales units at standard selling price (46,000 x £15) 690,000
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Sales volume profit variance: (46,000 – 45,000) x £(15 – 9) 6,000 F
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(b) The person (or persons) who should receive the information generated by any system in an organisation should be the person with responsibility for that aspect or part of the business to which the information relates In the case of sales variance information, it would be the person responsible for sales in the organisation This could be the sales manager or marketing manager In a large divisionalised company it may be the divisional manager A summary of the sales and cost variances would be issued to senior management in the organisation
Less Non-production costs (44,000)
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Less Fixed production costs (48,000 x £5) (240,000)
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Absorption costing net profit [as above in (i)] 226,000
Deduct Increase in stocks at standard fixed
production cost per unit
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4 (a) (i) EOQ for the current year = [(2 x 25 x 90,000) ÷ 8]0·5= 750 units
(ii) EOQ for next year = [(2 x 36 x 90,000) ÷ 8]0·5= 900 units
holding cost ordering cost total cost
Current year
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6,000 ––––––
Next year
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7,200 ––––––
Total extra cost of holding and ordering stock for next year £1,200
(compared with current year)
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Trang 8(c) Any two for each of the following:
(i) Interest on net working capital, costs of storage space, insurance costs, obsolescence, pilferage and deterioration (ii) Costs of contacting supplier to place an order, costs associated with checking goods received and transport costs
Contribution per litre of Material L 18 16
Optimal production plan for first three months of next year is to produce and sell 4,800 units of Product X (24,000 litres ÷
5 litres/unit) giving a total contribution of £432,000 (4,800 units at £90 per unit)
(b) Let x = the number of units of product X
and y = the number of units of product Y
Formulation of constraints:
Material L 5x + 6y ≤ 24,000
Material M 6x + 4y ≤ 24,000
Optimal point is the intersection of 5x + 6y = 24,000 ……….(1)
and 6x + 4y = 24,000 ……….(2) Solving these simultaneously gives:
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y = 1,500 and x = 3,000 The optimal production plan for the second three months of next year is to produce 3,000 units of product X and 1,500 units
of product Y This will give a resultant total contribution of [(3,000 x 90) + (1,500 x 96)] = £414,000
Trang 9Part 1 Examination – Paper 1.2
Marks Section A
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Section B
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