14 QUESTION 5 A. The manager of a small printing business receives an enquiry from a customer about printing 30,000 leaflets The customer is willing to pay 25,000 Currently there is no spare capacity in terms of labour and the variable labour and overhead costs of producing these leaflets would be 80 per 1.000 leaflets The leaflets would be printed on a special type of paper which costs 500 per 1,000 leaflets. However, there are already sufficient quantities of the paper in store for 20,000 of the leaflets. This special paper was purchased three months ago for a customer who then cancelled his order. The material has a disposal value of 1,500 but it could also be used to produce 20,000 units of leaflet C The cost of normal paper for leaflet C is 300 per 1.000 leaflets Required Calculate the relevant costs of making the leaflets for this special order (10 Marks) B. Explain the difference between the following terms, providing examples where they will assist your explanation 1. Direct cost and Indirect cost 2. Cost allocation and cost apportionment (6 Marks) C. An Investment centre has reported a profit of 40.000. It has the following assets and liabilities BP02229555 Connected 1 hour, 56 minutes remaining P HII E Non-current assets (al Net Book value) 200,000 Inventory Trade receivables 30,000 45.000 75,000 Trade payables 8.000 67.000 NETASSETS 267.000 Required 1 Calculate ROI for this centre 2. Will the answer be some if it is given that the centre manager has no responsibility for debt collection and why? 3. Recalculate (if needed) ROI using additional information from 2 above 19 Marks) Fill in your answer here 5. X 11 14 7 10 12 1 2 4 5 Type here to search 14 QUESTION 5 A. The manager of a small printing business receives an enquiry from a customer about printing 30,000 leaflets The customer is willing to pay 25,000 Currently there is no spare capacity in terms of labour and the variable labour and overhead costs of producing these leaflets would be 80 per 1.000 leaflets The leaflets would be printed on a special type of paper which costs 500 per 1,000 leaflets. However, there are already sufficient quantities of the paper in store for 20,000 of the leaflets. This special paper was purchased three months ago for a customer who then cancelled his order. The material has a disposal value of 1,500 but it could also be used to produce 20,000 units of leaflet C The cost of normal paper for leaflet C is 300 per 1.000 leaflets Required Calculate the relevant costs of making the leaflets for this special order (10 Marks) B. Explain the difference between the following terms, providing examples where they will assist your explanation 1. Direct cost and Indirect cost 2. Cost allocation and cost apportionment (6 Marks) C. An Investment centre has reported a profit of 40.000. It has the following assets and liabilities BP02229555 Connected 1 hour, 56 minutes remaining P HII E Non-current assets (al Net Book value) 200,000 Inventory Trade receivables 30,000 45.000 75,000 Trade payables 8.000 67.000 NETASSETS 267.000 Required 1 Calculate ROI for this centre 2. Will the answer be some if it is given that the centre manager has no responsibility for debt collection and why? 3. Recalculate (if needed) ROI using additional information from 2 above 19 Marks) Fill in your answer here 5. X 11 14 7 10 12 1 2 4 5 Type here to search