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Legacy Roofing Global Ltd specialises in roofing sheets manufacturing producing three variants below: 1 . Basic this is transparent mainly for use on garden sheds.
Legacy Roofing Global Ltd specialises in roofing sheets manufacturing producing three variants below:
Basic this is transparent mainly for use on garden sheds.
Standard standard quality house roofing sheets.
Premium high quality house roofing sheets.
Each of these roofing sheets uses Special Weatherproof Material which blocks outside weather from affecting indoors. Due to industrial actions, the maximum supply of the Special Weatherproof Material as confirmed by Protect Supplies Ltd the supplier is metres.
Maximum market demand and resource requirements of each of these roofing sheets for year are shown below:
Budgeted data year ending August
Basic Standard Premium
Maximum demand
Special Weatherproof Material per sheet metres Metres Metres Metres
Legacy Roofing Global Ltds employs a low cost and nofrills strategy aiming value for money delivery to its customers. To curtail high cost of stock storage, Legacy Roofing Global Ltd operates on a justintime production JIT method so that opening and closing inventory levels of the Special Weatherproof Material are zero.
Without mandate, Amelia Rose Legacy Roofing Global Ltds Sales Director has already accepted an order for Standard Roofing Sheets Contract to Rolco Construction Group that, if not fulfilled, would incur a financial penalty of This order is not included in the Standards maximum market demand figure. This implies Legacy Roofing Global Ltd should prioritise fulfilment of the Standard Roofing Sheets Contract ahead of normal annual demand requirements. The contract selling price per Standard Roofing Sheet is the same as normal Standard Roofing Sheets.
Legacy Roofing Global Ltds directors need to know whether they should go ahead and satisfy the contract and then prioritise production in the normal way or whether it should consider breaching the Rolco Construction Groups Standard Roofing Sheets Contract.
You have been provided with the following actual results for years ended August and August :
Actual results for year ended August
Basic Standard Premium Total
Sales Number of sheets
Sales Revenue
Raw Materials
Direct Labour
SemiVariable Overheads
Total Costs
ProfitLoss
Actual results for year ended August
Basic Standard Premium Total
Sales Number of sheets
Sales Revenue
Raw Materials
Direct Labour
SemiVariable Overheads
Total Costs
ProfitLoss
The selling price per roofing sheet, raw materials, other variable overheads and labour costs per roofing sheet for year ending August will be the same as those in year ended August
Required:
Use Management Accounting techniques for example HighLow Method where necessary and applicable.
In light of the scenario above, rank these three roofing sheet variants Basic Standard and Premium in the order in which they must be produced by Legacy Roofing Global Ltd Rank being the one to be prioritised. Clearly show your workings.
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Prepare a budgeted production schedule and a Marginal Costing Income Statement analysed by product the year ending August assuming that the Standard contract is honoured. marks for the Production Plan, marks for the Marginal Costing Income Statement
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Prepare budgeted production schedule and a Marginal Costing Income Statement analysed by product for the first half of assuming that the Standard contract is not honoured. marks for the Production Plan, marks for the Marginal Costing Income Statement
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Considering quantitative and qualitative issues, critically evaluate then advise Legacy Roofing Global Ltds Directors whether to accept or reject the Rolco Construction Groups Standard Roofing Sheets Contract.
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You have now been advised that a new roofing sheets manufacturer that will compete with Legacy Roofing Global Ltd has been established that would force Legacy Roofing Global to reduce its selling price per roofing sheet by in Protect Supplies Ltd the supplier of Special Weatherproof Material has also hinted that the price of the Special Weatherproof Material might increase by in
Assuming these changes selling price per sheet reduction and a increase in the Special Weatherproof Material answer all the quuestion properly
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