Question
THEORY 25% 1. In measuring profit center performance, there are two methods, Absorption and Variable Costing, explain each and what is the difference? 2. In
THEORY 25% 1. In measuring profit center performance, there are two methods, Absorption and Variable Costing, explain each and what is the difference? 2. In managing accountability accounting, companies usually combine centralized and decentralized decision-making strategies, explain each? 3. One of the cost volume profit analysis is the BEP analysis. What is the BEP analysis and what are the benefits for the company?
COUNT (75%)
1.Absorption & Variable costing (25%)
PT Happy presents cost data as follows: Direct cost per unit IDR 30.000 Overhead cost-variable per unit Rp 4,800 Overhead cost - fixed per unit Rp 4,200 Variable selling expense per unit Rp 1,000 Fixed operating expenses total Rp. 54,800,000. The data for 2019 and 2020 are as follows: 2019 2020 Normal Capacity in units 61,000 units 64,000 units Actual production amount in units 54,000 units 63,000 units Initial finished goods inventory units 10,000 units 15,000 units Units of ending finished goods inventory 12,000 units 14,000 units The selling price of the product per unit is IDR 42,000.
Requested: Prepare PT Bahagia's income statement based on absorption costing and variable costing for 2019 and 2020 and reconcile the difference in net income between absorption costing and variable costing
2. Performance Evaluation & Decentralization - ROI & EVA (25%)
The following is the profit and loss report of PT Al Mawarid last year, Division of Hajj and Umrah equipment: Sales $480,000 COGS (222,000) Gross Margin $258,000 Selling & Adm Expense (210,000) Operating Income $48,000 At the beginning of the year, the value of the operating assets was $277,000, at the end of the year the value of the operating assets was $323,000 and the total employee capital was $300,000. Define: a. Average operating assets b. Margin c. Turn over d. ROI e. EVA (30% tax and 10% actual cost of capital)
3.Cost volume profit analysis (25%) PT Sukses is a company that produces chocolate cakes, each box weighing 10 ounces is sold for IDR 5.6, the variable costs per unit are as follows: Nuts Rp0.7 Sugar Rp0.35 Butter Rp1.85 Other ingredients Rp0.34 Box, packing Rp0.76 Sales commission IDR 0.2
Fixed overhead costs are $32,300 per year. Fixed selling and administrative costs are IDR 12,500 per year, PT Sukses sold 35,000 boxes last year Requested: 1. What is the contribution margin per unit for each box of chocolate cake?, and what is the contribution margin ratio? 2. How many boxes must be sold to break even?, what is the break-even sales revenue 3. What was the operating profit of PT Sukses last year (sales of 35,000 boxes)? 4. What is the margin of safety 5. Suppose PT Sukses increases the price to Rp. 6.2 per box, but has anticipated a decrease in sales to 31,500 boxes. What is the new break-even point in units? and should PT Sukses increase the price, please explain
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