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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
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)?
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