Briefly answer the following questions by referring to the marking guide provided.

Within the industry of restaurants or fast food business choose a product which is offered in Maldives.

For the chosen product,

a.Identify all necessary costs that would be incurred to produce and market the product to customers.

b.An appropriate market value should be identified for all costs that would be incurred. (Marks would be deducted for unrealistic estimates).

c.Be creative in making your product attractive to customers and identify the costs that will be incurred to bring the product up to the sales point. Minimum of five types of cost must be identified with explanations including values and the behaviors of the costs.

d.Using the identified costs calculate the unit cost of the product and a sales price. Explanations must be given on how you decided the values of the costs that are included in your calculations. (hint: can refer to behavior or direct or indirect costs)

e.If 150 units were produced, calculate (use the figures identified in part b, c, and d) the

i.Total prime cost

ii.Production overheads

iii.Total production costs

iv.Total Non-production overheads

f.Using the figures above calculate the profit using both Absorption costing and marginal costing method assuming that 100 units of the product were sold.

g.Identify if there is any difference in profit or not, discuss the reason.

h.Among the different methods of costing studied which method would you choose to follow in order to identify an accurate unit cost and a profit figure. Justify your answer.

MARKING GUIDELINE :

Structure

Criteria

Marks

Introduction

Give an explanation of the product and what to expect in your explanation

4

Identification of feasible product

2

Cost identification

An appropriate level of depth covered and a practical list of costs identified

4

Cost identified reflects market values

creativity

4

2

Calculations

Values used are explained appropriately with reference to the behavior and classifications of costs

6

Accurate calculation of unit cost and a selling price

6

Accurate calculation of Profit using both

marginal and

Absorption method

3

3

Discussion

Identification of difference in profit and discussion

4

Among different costing methods which method of costing would be most appropriate to your product and justify your answer

4

note; all information are present

Briefly answer the following questions by referring to the marking guide provided. Within the industry of restaurants or fast food business choose a product which is offered in Maldives. For the chosen product, a. Identify all necessary costs that would be incurred to produce and market the product to customers. b. An appropriate market value should be identified for all costs that would be incurred. (Marks would be deducted for unrealistic estimates). Be creative in making your product attractive to customers and identify the costs that will be incurred to bring the product up to the sales point. Minimum of five types of cost must be identified with explanations including values and the behaviors of the costs. d. Using the identified costs calculate the unit cost of the product and a sales price. Explanations must be given on how you decided the values of the costs that are included in your calculations. (hint: can refer to behavior or direct or indirect costs) If 150 units were produced, calculate (use the figures identified in part b, c, and d) the i. Total prime cost ii. Production overheads iii. Total production costs iv. Total Non-production overheads f. Using the figures above calculate the profit using both Absorption costing and marginal costing method assuming that 100 units of the product were sold. g. Identify if there is any difference in profit or not, discuss the reason. h. Among the different methods of costing studied which method would you choose to follow in order to identify an accurate unit cost and a profit figure. Justify your answer. Structure Criteria Marks Introduction Give an explanation of the product and what to expect in your explanation Identification of feasible product 2 Cost identification An appropriate level of depth covered 4 and a practical list of costs identified Cost identified reflects market values 4 creativity 2 Calculations Values used are explained appropriately 6 with reference to the behavior and classifications of costs Accurate calculation of unit cost and a 6 selling price Accurate calculation of Profit using both marginal and W W Absorption method Discussion Identification of difference in profit and 4 discussion Among different costing methods which 4 method of costing would be most appropriate to your product and justify your