Unit: Management accounting
11 Questions| Sh. "000" | |
| Production departments | |
| X | 2,500 |
| Y | 2,000 |
| Z | 1,500 |
| Service departments | |
| A | 1,000 |
| B | 780 |
| Total | 7,780 |
| 1 | A technical assessment for the apportionment of the service department costs were as follows: |
| Department | X | Y | Z | A | B | |
| A | 30% | 30% | 20% | - | 20% | |
| B | 40% | 30% | 20% | 10% |
| 2 | Output for the production departments during the period are provided below: |
| Department | Units of outputs | |
| X | 200,000 | |
| Y | 100,000 | |
| Z | 50,000 |
| Sh. | |
| Materials | 120 |
| Labour | 40 |
| Variable overheads | 40 |
| Fixed overheads | 100 |
| Selling price | 400 |
| (i) | Calculate the Break-Even-Point (BEP) of sales at the current selling price for 1,000 units. |
| (ii) | The marketing manager intends to reduce the selling price by either 10% or 20% for the 1,000 units without affecting the total profit. |
| Advise the marketing manager on the required sales volumes under the two options. |
| Annual consumption of Exe (units) | 200,000 |
| Ordering cost per order (Sh.) | 18,750 |
| Carrying cost per unit (Sh.) | 3 |
| Cost ledger opening trial balance | ||
| Sh. | Sh. | |
| Financial ledger control account | 249,520 | |
| Work-In-Progress (WIP) control account | 125,210 | |
| Finished goods control account | 85,150 | |
| Stores ledger control account | 39,160 | |
| 249,520 | 249,520 | |
| Income statement extracts: | ||
| ABC Ltd. Sh. "000" | XYZ Ltd. Sh. "000" | |
| Sales | 497,000 | 371,000 |
| Cost of sales | (357,840) | 9296,800) |
| Gross profit | 139,160 | 74.200 |
| Operating expenses | (70,460) | (45,520) |
| Interest | (19,000) | - |
| Net profit | 49,700 | 29,680 |
| Statement of financial position extracts: | ||
| ABC Ltd. Sh. "000" | XYZ Ltd. Sh. "000" | |
| Non-current assets | 142,000 | 92,000 |
| Current assets: | ||
| Inventory | 100,000 | 87,000 |
| Accounts receivable | 46,000 | 42,000 |
| Cash at bank | 40,000 | 44,000 |
| Current liabilities | 98,000 | 108,000 |
| Long-term loans | 33,000 | - |
| Shareholder funds | 197,000 | 157,000 |
| Budget Units | Actual Units | |
| Sales | 60,000 | 58,000 |
| Production | 60,000 | 60,000 |
| Sh. | Sh. | |
| Sales | 840,000 | 823,600 |
| Direct materials | 240,000 | 246,000 |
| Direct labour | 300,000 | 288,000 |
| Fixed overheads | 135,000 | 140,000 |
| Net income | 165,000 | 149,600 |
| Process 1 Sh. | Process 2 Sh. | |
| Direct materials (30,000 units at Sh.20 per unit) | 600,000 | - |
| Conversion costs | 765,000 | 2,262,000 |
| Scrap value of normal loss per unit | 5 | 20 |
| 1 | The output in Process i is transferred to Process 2 and amounted to 26,000 units. |
| 2 | The output in Process 2 consists of three joint products as follows: |
| Product | H | N | T | |
| Quantity (units) | 10,000 | 7,000 | 6,000 |
| 3 | The normal loss for both Process 1 and Process 2 is 10%. |
| 4 | The unit selling prices for H, N and T are Sh.180, Sh.200 and Sh.300 respectively. |
| 5 | All joint products are sold as soon as they are produced. |
| 6 | Sales value method of joint costs apportionment is used. |
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