Required:

1.1 Prepare a schedule that shows the relevant cost of the new customer order

1.2 Explain for each of the resource items numbered 1 to 7, the reason for each of the values you have included in your answer to 1.1 above

DISTANCE AWANCED DIPLOMA IN FINANCIAL MANAGEMENT-AGADEMIC AND ASSESSMENT CALENDAR 22 ADVANCED MANAGERIAL ACCOUNTING an engineering company. produces tools and components to customers specific rements. EC uses absorption costing to absorb overheads into the cost of each somer order. Selling prices are usually determined by adding a 30% mark up to mecosos incurred in completing the order EC has recently been asked to provide a quotation for a new customer. The details of resource requirements have been determined. The cost of these resources has been he work have been discussed at a meeting with the customer and the following calculated using the company's routine costing system [207 QUESTION ONE (100) price K23psm. Note R plats alace material A- A-inventory Direct material B-Need to be busy as 5 square metres @ R20 10 square metres R15 100 3 100 hours @ R8 4 Skilled labour Unskilled labour Supervision labour Machine overhead Other overhead 150 800 360 400 60 hours R6 20 hours @ R20 20 hours @ R12 160 labour hours @ R4 5 6 7 240 640 Total cost 2.690 Notes: 1. Direct material A is currently held in inventory and is in regular use. The latest price paid for material A was R22 per square metre, but the replacement cost would be R23 per square metre. 225 2 Direct material B is currently not used by EC and would have to be bought if the work is undertaken. The minimum order from the supplier of material B is for 25 square metres. EC does not expect to be able to use this material on any other work, though it would be able to sell it as scrap for R2 per square metre. 23 REGENT BUSINESS SCHOOL (RBS) - JANUARY 2020 ANINANCIAL MANAGEMENT ACADEMIC AND ASSESSMENT CALENDAR DISTANCE The ed about that would be required is available within EC, but only if those loyees are transferred from other work that they are currently doing mother work could be done by sub-contractors who could be hired on an hourly pass at a cost of R7 per hour. Alternatively sub-contractors could be hired to work on new customer's order at a cost of R9 per hour. EC's current skilled labour is paid The unskilled labour is paid an hourly rate of R6 but only for hours that they are thly working. There are only 40 hours of additional unskilled labour available thin normal working hours. In order to complete the customer order on time they would have to work 20 hours of overtime. EC pays an overtime premium of 50% $ The work would be supervised by the existing supervisor as part of his normal activity The supervisor is paid an annual salary which is equivalent to R20 per hour for a 40 hour working week The machines that would need to be used have a running cost of R12 per hour Two different machines would be required machine W for 12 hours and machine 2 fortrous Bon machines are regularly used by EC Machine W is very specialised R and is used for only some of EC's work. There is sufficient spare capacity on this machine Machine Z is in constant use by EC and, if it is required for this customer de would need to hire an additional machine at a hire cost of Rs per hour ding wing costs) to fulfill its normal work Conoschine related fixed overhead costs are absorbed into productos on tale per labour hour if the customer order is accepted it must be wird dann daye to would like to win this onerasit believes that H ADVANCED DIPLOMA IN FINANCIAL MANAGEMENT - ACADEMIC AND ASSESSMENT CALENDAR DISTANCE REQUIRED: 1.1 Prepare a schedule that shows the relevant cost of the new customer's order. J Details on! Amounts on (13) the left the right 1.2 Explain, for each of the resource items numbered 1 to 7, the reason for each of the values you have included in your answer to 1.1 above. (7) reasons QUESTION TWO [20] Discuss the advantages and disadvantages of contracts on behalf of manufacturers and contracts on behalf of contractees. Chaprer 7 pg 93-94 Studio [40] anginal QUESTION THREE bles Dhe 1201 DISTANCE AWANCED DIPLOMA IN FINANCIAL MANAGEMENT-AGADEMIC AND ASSESSMENT CALENDAR 22 ADVANCED MANAGERIAL ACCOUNTING an engineering company. produces tools and components to customers specific rements. EC uses absorption costing to absorb overheads into the cost of each somer order. Selling prices are usually determined by adding a 30% mark up to mecosos incurred in completing the order EC has recently been asked to provide a quotation for a new customer. The details of resource requirements have been determined. The cost of these resources has been he work have been discussed at a meeting with the customer and the following calculated using the company's routine costing system [207 QUESTION ONE (100) price K23psm. Note R plats alace material A- A-inventory Direct material B-Need to be busy as 5 square metres @ R20 10 square metres R15 100 3 100 hours @ R8 4 Skilled labour Unskilled labour Supervision labour Machine overhead Other overhead 150 800 360 400 60 hours R6 20 hours @ R20 20 hours @ R12 160 labour hours @ R4 5 6 7 240 640 Total cost 2.690 Notes: 1. Direct material A is currently held in inventory and is in regular use. The latest price paid for material A was R22 per square metre, but the replacement cost would be R23 per square metre. 225 2 Direct material B is currently not used by EC and would have to be bought if the work is undertaken. The minimum order from the supplier of material B is for 25 square metres. EC does not expect to be able to use this material on any other work, though it would be able to sell it as scrap for R2 per square metre. 23 REGENT BUSINESS SCHOOL (RBS) - JANUARY 2020 ANINANCIAL MANAGEMENT ACADEMIC AND ASSESSMENT CALENDAR DISTANCE The ed about that would be required is available within EC, but only if those loyees are transferred from other work that they are currently doing mother work could be done by sub-contractors who could be hired on an hourly pass at a cost of R7 per hour. Alternatively sub-contractors could be hired to work on new customer's order at a cost of R9 per hour. EC's current skilled labour is paid The unskilled labour is paid an hourly rate of R6 but only for hours that they are thly working. There are only 40 hours of additional unskilled labour available thin normal working hours. In order to complete the customer order on time they would have to work 20 hours of overtime. EC pays an overtime premium of 50% $ The work would be supervised by the existing supervisor as part of his normal activity The supervisor is paid an annual salary which is equivalent to R20 per hour for a 40 hour working week The machines that would need to be used have a running cost of R12 per hour Two different machines would be required machine W for 12 hours and machine 2 fortrous Bon machines are regularly used by EC Machine W is very specialised R and is used for only some of EC's work. There is sufficient spare capacity on this machine Machine Z is in constant use by EC and, if it is required for this customer de would need to hire an additional machine at a hire cost of Rs per hour ding wing costs) to fulfill its normal work Conoschine related fixed overhead costs are absorbed into productos on tale per labour hour if the customer order is accepted it must be wird dann daye to would like to win this onerasit believes that H ADVANCED DIPLOMA IN FINANCIAL MANAGEMENT - ACADEMIC AND ASSESSMENT CALENDAR DISTANCE REQUIRED: 1.1 Prepare a schedule that shows the relevant cost of the new customer's order. J Details on! Amounts on (13) the left the right 1.2 Explain, for each of the resource items numbered 1 to 7, the reason for each of the values you have included in your answer to 1.1 above. (7) reasons QUESTION TWO [20] Discuss the advantages and disadvantages of contracts on behalf of manufacturers and contracts on behalf of contractees. Chaprer 7 pg 93-94 Studio [40] anginal QUESTION THREE bles Dhe 1201