Factory overhead production costs E Maintenance 3,200 Material handling 5,500 Indirect labour (The Sub only) 1,500 Production set up 2,000 Electricity 4,500 Marketing Information: Currently all output is sold. Unit selling price E The Sub 150 VPP 170 VLS 200 Questions: (Round-up calculations to 2 decimal places) 1. Using the information provided in tables 1, 2 & 3 prepare detailed costing analysis, including the expected profit/ loss for each of the 3 components, based on: 1) An absorption costing system (show all calculations and provide an explanation for the absorption rate employed). (11 marks) ") An activity-based costing system (show all calculations and provide an explanation for the cost drivers employed). (12 marks) 2. Provide appropriate calculations based on marginal costing for each product; clearly show the overall profit/loss. Include any additional contribution / cost-volume-profit analysis as appropriate. In light of your analysis describe any other relevant matters that MeatFree Lid management should consider, (Show all calculations) (11 marks) 3. Interpret your calculations from Q1 & 2 and provide an evaluation of which costing method is most appropriate to MeatFree Lid for making pricing decisions and a recommendation as to whether The Sub product should be discontinued or not (Word limit: 500 words) (26 marks) 4. Critically review activity-based costing. (Word limit: 400 words) (20 marks) 5. Assess how the concept of marginal costing can be practically applied; give examples where appropriate. (Word limit: 400 words) (20 marks) END OF QUESTIONS N 2/2MGT5027 Management Accounting (test replacement) coursework assessment This assessment is worth 50% of the overall module grade. Start date: 12" March Submission date: 19" March Learning outcomes: 1,2,4,5. Assessment rubric: application, understanding and evaluation of main costing systems. Calculations can be done in hand, then take clear photos, add word document as appropriate, save as a PDF file then submit to Turnitin. Answer all questions (words included beyond the set word limits will not be assessed). SCENARIO MeatFree Lid is a manufacturer of meat substitute food products. The company produces a vegetarian ready meal called The Sub and two vegetarian, meat replacement compound mixtures, the Veggie Pulled Pork (VPP) and the Veggie Lamb Shank (VLS). There is some concern about the future of the company as market competition is high, and the board of directors are looking at new strategies to increase sales and profitability. According to the absorption costing scheme used by the last management accountant The Sub is making huge losses per unit and the marketing manager has reported that any increase in the selling price of this item will result in a reduction of sales volume Consequently, it is being deliberated whether or not to stop the manufacture of The Sub and concentrate on the more prosperous production and selling of the VPP and VLS products. You have been recently employed as a management accountant to provide fresh input into the decision-making process from a costing perspective and the following costing information has been provided: Production Information: Product |Output Material Direct labour Machine No. of set ups for hours per unit total production per unit per unit The Sub 100 10kg 5 hours VPP 50 4kg 2 hours 3 2 VLS 50 6kg 2 hours 2 Accounting Information: Material is purchased at a cost of $7 per kg Average hourly wage rate $10
