Question 1- 10 marks

Bbudgeting can be seen as a process of planning, monitoring and control. Explain the benefits of budgeting.( 10 marks)

Question 2-40 marks

Sanyo Company produces programmable and non-programmable calculators and operates at capacity. The following data are presented for your use:

Programmable Non-programmable

Annual production in units

50,000

100,000

Direct materials costs

$ 150,000

$ 300,000

Direct manufacturing labor costs

$ 50,000

$100,000

Direct manufacturing labor hours

2500

5000

Machine-hours

25,000

50,000

Number of production runs-set-ups

50

50

Inspection hours

1000

500

Manufacturing overheads are as follows:

Overhead cost pool Total for both products

Machining costs

$ 375,000

Setup costs

120,000

Inspection costs

105,000

Required

1-Choose a cost driver for each overhead cost pool and calculate the manufacturing overhead cost per unit for each product.(20 marks)

2-Compute the manufacturing cost per unit for each product.(15 marks)

3-How does the activity based costing system help Sanyos managers to better manage their business.(5 marks)

Question 3-10 marks

What are the factors that shape the culture of an organization? (4 marks) Explain briefly the four models of culture according to Handy (6 marks)

Question 4-40 marks

Assume you have a product with the following parameters:

Annual demand= 360 units

Holding cost per year = 1 $ per unit

Ordering cost = $ 100 per order

Requirement:

1-What is the EOQ for this product ( 7.5 marks) ?.

2- What is the total holding and ordering costs ( 7.5 marks) ?

3-Given the above data , how many orders should be processed per year ( 5 marks) ? Assuming a 300 day work what is the expected time (days) between orders ( 5 marks)?

4-Based on the information from 1 to 3 above , what would the actual total holding and ordering costs be if the annual demand was actually higher than estimated i.e 500 units instead of 360 units , but the EOQ established in question 1 above is used ( 10 marks) ?

5-If demand for an item is 3 units per day , and delivery lead time is 15 days , what would be the re-order point ( 5 marks)?