QUESTION 4 The production manager of Carter Ltd has been working with the nance manager to produce the budget for the forthcoming year. The nance
QUESTION 4 The production manager of Carter Ltd has been working with the nance manager to produce the budget for the forthcoming year. The nance manager has presented you with the following details Budget Units 1,000 E Sales 100,000 Raw Materials (50,000m) (50,000) Labour (5,000 hrs) (20,000) Fixed Overhead (20,000) Prot 10,000 REQUIRED: Please note: a maximum word count applies to some parts of this question. a) b) i) Explain the term \"standard cost\". (4 marks; max 140 words) ii) Based on the budgeted information above, derive the standard costs for the following: Selling Price (per unit), Raw Material (quantity per unit and price per unit), Direct Labour (quantity per unit and rate per unit). (8 marks) The HR manager is concerned about the employee morale and how it may impact their productivity levels. She has been tasked with writing a research report and will outline relevant theories of motivation which may inuence the company' s policy on benet packages. As her assistant, you have been tasked with carrying out some of this research. i) Briey explain the FOUR main theories of motivation. (12 marks; max 420 words) ii) Compare and contrast two of the theories in terms of the impact they may have on the form of benet packages the company could use. (8 marks) c) Carter Ltd has an annual turnover of 500,000 from its production of product A. The following is an extract from the standard cost information for product A. Product A selling price 40 Variable costs 20 Fixed cost allocation 5 (25) Net prot 15 For the current year, the cost of capital is 10%, with an average collection period of 30 days. The manager of the credit control department is conducting a protability analysis to evaluate three options for credit policy that will affect future cost of capital: Option 1 Option 2 Option 3 Increase in average collection period 10 days 20 days 30 days Projected increase in sales 20,000 45,000 55,000 i) Explain the term cost of capital. (2 marks; max 70 words) ii) Determine which option the company should take. Show full workings, clearly indicating the option you recommend and why. (20 marks) (Total marks for question 4: 50 marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance