Cymbeline Ltd manufactures a single product. The company has two production departments, I and 2, and a service department. The following are the variable costs per product unit for April: Direct materials Direct labour Manufacturing overhead 7.00 5.50 2.00 The selling price of the product is 36.00 per unit. Fixed manufacturing costs are budgeted to be 1,340,000 for April. Fixed selling costs are budgeted to be 875,000. Fixed manufacturing costs can be analysed between the departments as follows: Production Production Service 1 2 Department 380,000 465,000 265,000 In addition there are budgeted general factory fixed costs of 230,000, these represent space costs, for example, lighting and heating. Space utilization is as follows: Production department 1 40% Production department 2 50% Service department 10% In allocating the service department costs it is assumed that 60% of service department costs are labour related and the remaining 40% machine related Normal production department activity is: Direct labour hours Machine hours Production units Department 1 80,000 2,400 120,000 Department 2 100,000 2,400 120,000 Fixed manufacturing overheads are absorbed at a predetermined rate per unit of production for each production department, based upon normal activity. Costs for the period were as per budget, except for additional expenditure of 20,000 on fixed manufacturing overhead in Production Department 1. Production and sales were 116,000 and 114,000 units respectively for the period. Required: (a) Calculate the budgeted fixed overhead absorption rate per unit and the budgeted total manufacturing cost per unit for April (8 marks) (b) Prepare a profit statement for April using the full absorption costing system described above and showing each element of cost separately. (10 marks) (c) Prepare a profit statement for April using marginal costing principles. (7 marks) Present value of 1 1 4 5 6 7 8 9 10 Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 2 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751 4 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 % 11 12 13 14 15 16 17 18 19 20 Period 1 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 2 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.718 0.706 0.694 3 0.731 0.712 0.693 0675 0.658 0,641 0.624 0.609 0.593 0.579 4 4 0.659 0.636 0.613 0.592 0.572 0.552 0.534 0.516 0.499 0.482 5 0.593 0.567 0.543 0.519 0.497 0.476 0.456 0.437 0.419 0.402 4 Annuity of 1 % 1 2 3 4 5 6 7 8 9 10 7 Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 2 1.970 1.942 1.913 1,886 1.859 1.833 1.808 1.783 1.759 1.736 3 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 5 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 % 11 12 13 14 15 16 16 17 18 19 20 Period 1 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 2 1.713 1.690 1.668 1.647 1.626 1.605 1.585 1.566 1.547 1.528 3 2.444 2.402 2.361 2.322 2.283 2.246 2.210 2.174 2.140 2.106 4 3.102 3.037 2.974 2.914 2.855 2.798 2.743 2.690 2.639 2.589 S 3.696 3.605 3.517 3.433 3.352 3.274 3.199 3.127 3.058 2.991 Cymbeline Ltd manufactures a single product. The company has two production departments, I and 2, and a service department. The following are the variable costs per product unit for April: Direct materials Direct labour Manufacturing overhead 7.00 5.50 2.00 The selling price of the product is 36.00 per unit. Fixed manufacturing costs are budgeted to be 1,340,000 for April. Fixed selling costs are budgeted to be 875,000. Fixed manufacturing costs can be analysed between the departments as follows: Production Production Service 1 2 Department 380,000 465,000 265,000 In addition there are budgeted general factory fixed costs of 230,000, these represent space costs, for example, lighting and heating. Space utilization is as follows: Production department 1 40% Production department 2 50% Service department 10% In allocating the service department costs it is assumed that 60% of service department costs are labour related and the remaining 40% machine related Normal production department activity is: Direct labour hours Machine hours Production units Department 1 80,000 2,400 120,000 Department 2 100,000 2,400 120,000 Fixed manufacturing overheads are absorbed at a predetermined rate per unit of production for each production department, based upon normal activity. Costs for the period were as per budget, except for additional expenditure of 20,000 on fixed manufacturing overhead in Production Department 1. Production and sales were 116,000 and 114,000 units respectively for the period. Required: (a) Calculate the budgeted fixed overhead absorption rate per unit and the budgeted total manufacturing cost per unit for April (8 marks) (b) Prepare a profit statement for April using the full absorption costing system described above and showing each element of cost separately. (10 marks) (c) Prepare a profit statement for April using marginal costing principles. (7 marks) Present value of 1 1 4 5 6 7 8 9 10 Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 2 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751 4 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 % 11 12 13 14 15 16 17 18 19 20 Period 1 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 2 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.718 0.706 0.694 3 0.731 0.712 0.693 0675 0.658 0,641 0.624 0.609 0.593 0.579 4 4 0.659 0.636 0.613 0.592 0.572 0.552 0.534 0.516 0.499 0.482 5 0.593 0.567 0.543 0.519 0.497 0.476 0.456 0.437 0.419 0.402 4 Annuity of 1 % 1 2 3 4 5 6 7 8 9 10 7 Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 2 1.970 1.942 1.913 1,886 1.859 1.833 1.808 1.783 1.759 1.736 3 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 5 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 % 11 12 13 14 15 16 16 17 18 19 20 Period 1 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 2 1.713 1.690 1.668 1.647 1.626 1.605 1.585 1.566 1.547 1.528 3 2.444 2.402 2.361 2.322 2.283 2.246 2.210 2.174 2.140 2.106 4 3.102 3.037 2.974 2.914 2.855 2.798 2.743 2.690 2.639 2.589 S 3.696 3.605 3.517 3.433 3.352 3.274 3.199 3.127 3.058 2.991