BAC 300: MANAGEMENT ACCOUNTING 1

- 057 accounting 2 . Tatoo Ltd supplies you with the following details for their two products. Product Budgeted Production Actual Production . Axe 10,000 units 12,000 units Bent - 20,000 units 19,000 units Wages rate per hour is sh.2.50 for Axe and sh.3 for Bent respectively. In a month 7,000 hours were paid at sh.3 per hour. Of these hours, 350 hours were unproductive for unbudgeted holidays. There was a loss of production of 250 units of Axe due to power failure. A standard hour represent 5 units for Axe and 4 units .... for Bent. Calculate labour variance. (25 marks) ice( b ) A factory which makes tyres has a capacity to provide 19,800 hours of machine use. The factory makes all type A tyres or all type B tyres or a mixture of the two types. This was information available in one period. Tyre type A B LONPOSS Revenue and cost Sh. Sh. Selling price 10 15 Variable cost 8 12 Standard hours W 4 Market conditions are such that no more than 4,000 type A and 3,000 type B, can be sold per year. Annual fixed cost is sh.9,900. Required: Compute the product mix to maximize the net income. . (20 marks