Answered step by step
Verified Expert Solution
Question
1 Approved Answer
FILE TOOLS VlEW Question 3 - Word [Product Activation Failed] CU: X Total Costs 163.000 145.500 542.000 853.500 3.5 Budgeting serves various purposes including planning,
FILE TOOLS VlEW Question 3 - Word [Product Activation Failed] CU: X Total Costs 163.000 145.500 542.000 853.500 3.5 Budgeting serves various purposes including planning, con- Pmmmssm) 39557 43500 153153 241329 trol, motivation and communication. You have been requested by Clara Ores the Finance Director to explain to Euro Engineering Ltd directors the importance of budgeting in light of the purposes Required: above [5 marks] Use management accounting techniques for example High-Low Method where applicable. Question 3 Totals: 600 . . . . g - I 3.1 Applying marginal costing techniques, rankthe products wordsle Uivalent 30 marks [6 marks] 3.2 Prepare a budgeted production schedule and a marginal cost income statement (analysed by product including the total) for the year ending 31 August 2023 assuming that the Metal contract honoured [8 marks] 3.3 Prepare a budgeted production schedule and a marginal cost income statement (analysed by product including the total) for the year ending 31 August 2023 assuming that the Metal contract IS NOT honoured [8 marks] 3.4 Considering calculations above and other qualitative issues, advise Euro Engineering Ltd directors whether to honour or dis- honour the Metal Percolator Contract [3 marks] SCREENS 31-4 DF 4 ,0 Type here to search a gs: ' ' 27"(2 Sunny FILE TOOLS VIEW Question 3 - Word (Product Activation Failed) - B X Question 3 Actual results for August 2022 Euro Engineering Lid manufactures three types of ceramic coffee percolator; the Metal, pink and the Zinc models. The maximum market demand and resource requirements of each of Metal Pink Zinc Total these products are shown below. Sales (units 7,500 5,000 4,300 16,800 The percolators are made from an advanced heat-resistant material that gives the firm a competitive advantage. An email from the purchasing manager has informed you that, because of a problem with the supplier, it should be assumed that the half year's supply of Sales revenue (E) 190,000 160,000 450,000 800,000 this special material is limited to 80,000kg. Raw materials (E) 6,000 76,000 134.000 276,000 Euro Engineering Lid operates on a just-in-time production (JIT) method so that opening and closing inventory levels are zero Direct labour (E) 26,400 29,000 110,000 165,400 The sales director has already accepted an order for 5.000 Metal percolators that, if not Semi-Variable Overheads (f) 67.200 48,000 90,000 205,200 fulfilled, would incur a financial penalty of $12,000. This order is included in the Metal's maximum market demand figure. Total Costs 159,600 153,000 334,000 646,600 Continental's directors need to know whether they should go ahead and satisfy the contract Profit / (Loss) (E) 30,400 7,000 116,000 153,400 and then prioritise production in the normal way or whether it should consider breaching the contract and incurring the penalty. Actual results for August 2021 The selling prices, raw material costs, labour costs and other variable overheads rates per unit for 2023 financial year will be the same as those in 2022. Metal Pink Zinc Total Budgeted data for the first year ended 2023 Sales (units) 8,000 6.000 5,700 20,700 Metal Pink Zinc Sales revenue (E) 202,667 192,000 701,163 1,095,829 Maximum demand 8,000 8,000 9,000 Raw materials (E) 65,000 76,000 222,000 363,000 Heat resistant material per unit 3 Kg 5 Kg 4 Kg Direct labour (E) 28,000 23,500 190,000 241,500 Semi-Variable Overheads (E) 70,000 49,000 130,000 249,000 Activate Windows Go to Settings to activate Windows. SCREENS 1-2 OF 4 + 118% Type here to search 21:52 H WE 27'C Sunny 01 4 x ENG 21-04-2023
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started