question:
provide income statement of Speedy Racer for the month of May 2020. Please show detailed revenue and cost items for each services.
Currently, the company use moving average method for forecas year data of the same month and add 20 percent to that and arrive at the forecast of the current month. FINANCIAL MATTERS Speedy Racer prepares monthly performance report based on standard cost. The following table shows the performance report for the month of May 2020, when revenue of Speedy Racer reached roughly 2000 customers. SPEEDY RACER SDN BHD PROFIT REPORT FOR THE MONTH ENDING 31 MAY 2020 Budgeted Actual Variance Number of customers 2000 2200 200 RM RM RM Operating Revenue 600,000 660,000 60,000 Operating costs: Depreciation 50,000 50,500 500 (A) Staffs wages 240,000 280,380 40,380 (A) Spare parts 180,000 220,400 40,400 (A) Administration cost 30,000 30,800 800 (A) Maintenance 13,000 14,070 1,070 (A) Other overhead costs 6,200 6,620 420 (A) Finance cost 7,500 7,500 Total Operating cost (526,700) (610,270) (83,570) Operating profit 73,300 49,730 23,570 (A) 8 |Pageou don't this new technique? DI- if you " - sing fixed budget PEEDY RACED The budgeted costs are ascertained as follows: 1. The average budgeted service charge for each customer is RM300. 2. Spare parts and staff wages are variable cost. 3. Depreciation, all administration and finance cost are fixed costs as well as RM3,900 of the total maintenance cost is fixed. 4. Other overhead costs are semi variable costs and for the last two months these were budgeted at RM8,000 and RM10,000 for 4000 and 6000 number of customers respectively. During the month of May, the actual charges price was the same as budgeted. It was found out that the actual fixed maintenance cost had increased to RM4,500 due to the recent upgrading of the maintenance used. Total fixed cost for other overhead costs remain the same as per budgeted. APPENDICES The wheels are placed on the dyno rollersfrom Speedy Racer tune-ups. The company promises that every customer deal with them will ith be satisfied with the significant changes in their vehicle engine power. told Youshy The vehicle engine tuning services offered by Speedy Racer are: Tuning Fuel Map to get maximum power and fuel savings Tuning Ignition Map to get maximum Torque Dial Camshaft Individual Throttle Synchronization The revenue of Speedy Racer is contributed largely by the above service provided. The following are the detail income contributed by each service for the month of May 2020: Tuning Fuel Tuning Dial Individual Total Ignition Camshaft Throttle RM RM RM RM RM Revenue 264,000 198,000 132,000 66,000 660,000 Total Expenses 229,513 178,216 126,919 75,622 610,270 Net Profit/(Loss) 34,487 19,784 5,081 (9,622) 49,730 Unfortunately, one of the service provided by Speedy Racer which is Individual Throttle service is contributing a loss to the company and the management is considering whether it should be dropped. However, the Finance Manager, Ms Adira points out that not all costs on the company's income statement would be eliminated if the operation of Individual Throttle is discontinued. As the Assistant Finance Manager of the company, Ms Adira has requests you to advise on whether the company should proceed with the service or should just discontinue the service. Ms Adira had obtained the following information that could be useful to prepare an analysis of the costs and benefits associated with dropping the service of Individual Throttle in Speedy Racer: 1. All fixed costs are apportioned equally to each services provided and are unavoidable, except for administration expenses. 2 . Sales revenue and variable costs are allocated to each services provided based on the following proportion of total sales: 6 | Page
