This reduction in price may have directly encouraged customers to buy more units.. The company sold 2,000 more units than planned giving the favourable sales volume contribution variance
Trang 1Answers
Trang 2Part 1 Examination – Paper 1.2
Section A
10 C
11 B
12 A
13 C
14 D
15 C
16 D
17 D
18 A
19 D
20 A
21 D
22 D
23 A
24 D
25 A
Variable cost per unit = [(274,000 – 250,000) ÷ (15,000 – 12,000)] = £8
Total fixed cost above 11,000 units = [274,000 – (15,000 x 8)] = £154,000
Total fixed cost below 11,000 units = (10 ÷ 11) x 154,000 = £140,000
Total cost for 10,000 units = [(10,000 x 8) + 140,000] = £220,000
Contribution per unit = (24 ÷ 0·60 x 0·40) = £16
Breakeven point = (720,000 ÷ 16) = 45,000 units
b = [(5 x 23,091) – (129 x 890)] ÷ [(5 x 3,433) – (1292)] = 1·231
a = (890 ÷ 5) – [(1·231 x 129) ÷ 5] = 146 (nearest whole number)
Trang 39 B
10 C
Closing stock (units) = 300 + 400 + 500 – 600 – 300 = 300
Valuation = (100 x11) + (200 x 13) = £3,700
11 B
(3 x £8) + [(4 – 3) x 0·75 x £8] = £30
12 A
13 C
14 D
15 C
(60 + 40 + 20) + [(40 ÷ 8) x 16] + (0·60 x 120) = £272
16 D
£ Sales value after further processing = (9,000 x 0·9) x £12 = 97,200
Sales value without further processing = (9,000 x £10) 90,000
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Less: Further processing cost = (9,000 x £1) (9,000)
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Decrease in profit by further processing £1,800
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17 D
[(45,600 x 4) – 173,280] = £9,120 Favourable
18 A
£ Actual usage at standard cost (45,600 x 4) 182,400
Less: Adverse usage variance (15,200)
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Actual production (units) = (167,200 ÷ 50) = 3,344
19 D
Opportunity cost now + disposal cost at end of contract (2,000 + 800) = £2,800
20 A
(800 – 450) x [8 + (14 ÷ 7)] = £3,500
21 D
Marginal cost (MC) = 15
Profit maximised when MC = MR
15 = 50 – 0·05Q
Q = 700
P = 50 – (0·025 x 700) = £32·50
Trang 422 D
When P = 20:
20 = 50 – 0·025Q
And Q = 1,200
Total contribution = 1,200 x (20 – 15) = £6,000
23 A
£
Less: Apportioned general costs (200 x 0.60) ÷ (500 ÷ 1,500) (40,000)
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If shop S closed down net contribution lost (60,000 – 30,000) 30,000
Revised budgeted profit for company (80,000 – 30,000) £50,000
24 D
25 A
Section B
Actual sales at standard selling price (34,000 x £22) 748,000
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Sales volume contribution variance:
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(b) The actual selling price (£21·50) was lower than the standard selling price (£22·00) – hence the adverse sales price variance This reduction in price may have directly encouraged customers to buy more units The company sold 2,000 more units than planned giving the favourable sales volume contribution variance of £26,000 Thus the two variances may be interrelated and if so the variances should be considered together – one partially offsetting the other
Less: Budgeted profit (marginal costing) (200,000)
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Less: Budgeted non-production fixed costs (1,152,000 ÷ 12) (96,000)
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Standard fixed production cost per unit (£120,000 ÷ 30,000) £4
Less: Decrease in stocks at standard fixed production
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Budgeted absorption costing manufacturing profit
Less: budgeted non-production fixed costs (96,000)
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Trang 52 (a) (i) Using the formula given:
EOQ = [(2 x 120 x 48,000) ÷ (0·10 x 80)]0·5= 1,200 units
£
Holding costs [(1,200 ÷ 2) x £80 x 0·10] 4,800
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Holding costs [(2,000 ÷ 2) x £80 x 0·99 x 0·10] 7,920
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Annual total saving (3,849,600 – 3,812,400) £37,200
(c) Insurance costs of stock and warehouse
Rent of warehouse
Rates of warehouse
Interest on capital tied up in stock
Optimal plan for buying in components:
Ranking Component Units Machine hours
saved
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Total shortfall of hours [as per (a)] 17,000
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(c) (1) The quality of the components supplied by Sergeant Ltd
(2) The loss of control over all aspects of production and delivery of the components
(3) The possibility of increasing the number of machine hours available next month by working overtime
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Normal loss
Trang 6W1 Cost per equivalent litre (EL):
Direct materials Conversion
Units started and finished in month 8,000 8,000
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Less: Scrap value of normal loss (3,000) –
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96,600 155,250 ––––––– –––––––
W2 Valuation of abnormal loss:
500 x (8·40 + 13·80) = £11,100
W3 Valuation of closing WIP:
(3,000 x £8·40) + (1,350 x £13·80) = £43,830
W4 Valuation of output:
£
Completion of opening WIP
Units started and finished in month
[8,000 x £(8·40 + 13·80)] 177,600
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221,520 ––––––––
(b) Type of organisation Unit cost measure
Haulage transport Tonne mile
Note: only two examples were required and other answers were acceptable
Allocated and apportioned overheads 477,550 404,250 132,000 96,000
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Absorption rate:
(b) Allocated overheads are specifically traceable to cost centres Apportioned overheads are those for which only a total factory-wide figure is available Therefore in order to get such overheads related to individual cost centres, the total has to be apportioned on a logical but arbitrary basis to the cost centres For example the total factory rates could be apportioned on the basis of the floor area occupied by each cost centre Electric power can be allocated if each cost centre is separately metered Thus allowing an accurate measure of the amount of power used in each cost centre Otherwise if there is only one meter for the whole factory, then the total cost of electric power would need to be apportioned to the factory cost centres For example by using the kilowatt hour rating of the machines and equipment in the various cost centres
Trang 7Part 1 Examination – Paper 1.2
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