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kindly help in solving these management accounting problems. your help will really go a milestone. thank you THIS INFORMATION IS FOR QUESTIONS ONE, TWO AND
kindly help in solving these management accounting problems. your help will really go a milestone. thank you
THIS INFORMATION IS FOR QUESTIONS ONE, TWO AND THREE Jolly Ltd produces two types of cars X and Y.The company uses absorption costing system. The following budgeted information has been provided for the two cars. X Y Budgeted Production (Units) 1,100 1,100 Variable costs per unit K30,000 K32,000 Machine hours to produce one car 200 200 Total budgeted machine hours 220,000 480,000 The fixed production overhead of K26,020,000 is not product specific and is absorbed using a machine hour rate.The Jolly Ltd is considering changing to activity based costing system.Budgeted fixed production overhead costs have been analysed as follows: K'000 Machining costs 7,000 Setup costs 12,000 Quality Inspection 7,020 Analysis have also revealed the following information X Y Cars per Production Run 10 40 Number of inspections per production run 20 80 QUESTION ONE What is the total cost of Car X using absorption costing? (4 Marks) QUESTION TWO What is the overhead cost per inspection using Activity Based Costing? (4 Marks) QUESTION THREE What is the setup cost per unit of car Y using Activity Based Costing? (4 Marks) QUESTION FOUR Product Y is made in a production process where machine time is a bottleneck resource. Production of one unit of Product Y takes 0.25 machine hours. The costs and selling price of Product Y are as follows: K Materials 10 Labour (0.5 hours) 7 Other factory costs 7 Sales price 30 Profit 6 In a system of throughput accounting, what is the return per factory hour? (4 Marks) QUESTION FIVE A company is developing a new product using a target costing approach. The initial assumption was that a sales volume of 200,000 units could be achieved at a selling price of K25 per unit. However,market research indicate that to achieve the sales volume of 200,000 units the selling price should be K23.5.The company wishes to obtain an average profit margin of 20%. The following data have been estimated for the product; Direct Material K10.45 per unit, Hourly production volume 20 units, Direct Labour cost K64 per hour, Variable overheads K82 per hour (absorbed on direct labour hour basis. Find costs to produce 200,000 units are estimated to be K680,000.What reduction in the cost quired to achieve the target cost per unit? (4 MarnStep by Step Solution
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