Please answer all questions..

Question 1 ECD Ltd has managers who are trying to find the two ways of calculating product cost and income statement. these are the variable costing and absorption costing methods Selected data for ECD Ltd are presented below Product X Hour rate for direst labour $ 25 Materials used in production [direct] $ 10,500 Produced units during this period 450 Sales [ in units 1 3000 Selling price $16.50 Variable overhead [VOH] $ 3400 Fixed overhead [ FOH] $ 3500 Non manufacturing cost Variable selling $ 4000 Fixed selling cost $ 6500 Variable admin cost $2400 Fixed admin cost $1700 Ending inventory $870 Beginning Inventory $1750 REQUIRED 1. Calculate product cost of product X using variable cost. 2. Calculate variable cost of goods for the year 3. Find the variable-costing net income 4. Calculate product cost of product X using absorption cost .. 5. Calculate cost of goods for the year using absorption method 6. Find the net income using absorption method [30 marks] Question 2 Part A Sample question with answer Bo Digital company has the capacity of producing 50,000 units annually. Budgeted operating results for 2020 are given below on the table Sales [40,000 @ $28} Variable costs: Manufacturing (40,000 at $4.60] Selling (40,000 at $0.95) Admin (40,000 at $1.20) Fixed Cost Manufacturing Selling & administrative $64,000 $ 16,000 Show all your workings A customer wants to buy 15,000 units at a price of $20 per unit. All fixed cost will decrease by 10% if the special order is accepted. Variable manufacturing costs would increase by 15% per unit for the special order only REQUIRED Determine whether the company should produce the special order or not Show all workings and use the format provided in review Part B BUY OR MAKE Question Buzz LDT management is making a decision of whether to make a part that is used in the making of a Product or to buy it from an outside supplier. Based on its financial report , it seems it costs the company $73.00 per unit to make the component. The cost is broken in the following manner $ Direct materials 50,000 Direct Labor 58,000 Variable Manufacturing Overhead 28,000 Fixed Manufacturing Overhead 10,000 Company uses 2000 components per year An supplier , John LTD offered to provide the part at $78.00. Some of the managers believed that they have to consider the proposal because the company may save on the cost = If the company buys the part from the supplier , it can save 10% of fixed manufacturing overhead per unit and the company can rent a part of the factory for $ 12,000 if production of that part is not produced REQUIRED Based upon relevant cost differences, should company make or buy the component. Show the calculation [ 40 marks ] Question 3 Tomson Ltd has identified the following overhead costs and cost drivers for next year Overhead Items [Budgeted] Power Maintenance cost Ordering cost E (cost) $ 27,000 17,800 8,150 Cost Driver [Budgeted] E( activity) Number of orders Machine Hours Kilowatt hours 4,000 5,000 52000 The following is one of the jobs completed during the year Product A $2200 Product B $3300 Direct materials = Direct Labour Units completed # of orders Machine hours Kilowatt hours Actual overhead $ 2500 210 40 350 200 $1800 $ 3030 400 21 256 400 $1550 The company's policy uses machine hours as the activity for FBC method The company's policy uses machine hours as the activity for FBC method REQUIRED Part 1 1. Calculate the predetermined rate for the plant using FBC based on machine hours for each job 2. Calculate total product cost using FBC based on Machine hours for each job 3. Calculate the unit cost for each Product 4. Is the overhead over-applied or under-applied? Part 2 5. Calculate the predetermined rate for the plant using ABC based on machine hours for each job 6. Calculate product cost under ABC. 7. Calculate the unit cost for each Product [ABC] 8. Is the overhead over-applied or under-applied under ABC? 9. Why does FBC differ for ABC methods ? [30 marks]