Class activities Blossom Flower Sdn Bhd is a manufacturing company producing artificial flowers Currently, the company makes two types of flower petals namely Rose and Lily. The budgeted production costs per annum in making the petals are as follows: Rose Lily Direct material (RM) Direct labour (RM) Overheads (RM) TOTAL COST (RM) Production (units) 60,000 40,000 60,000 160,000 100,000 20,000 30,000 50,000 100,000 40,000 All direct labours are paid at RM10 per hour. Total budgeted fixed produc overheads are RM54,000 and variable overheads are absorbed based on di labour hour. Outside supplier has offered flower petals of Rose and Lily at purchase price RM0.50 per unit each. The following information should be considered if management decides to purchase instead of manufacture the petals.
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- Company A produces a component used in the production of one of the company’s main products. The costs are budgeted as follows: Amount per unit (R) Amount per 5 000 units (R) Materials 5 25 000Labour 15 75 000Variable overhead 10 50 000Depreciation 4 20 000Allocated general overhead 12 60 000Total cost 46 230 000The components can be purchased from an outside supplier at a cost of R35 per unit. Required: Q.3.1 Determine whether the company should make or buy the component. In arriving at your solution clearly show all your workings, as marks will be allocated. Q.3.2 State five qualitative aspects that the company must evaluate before making a…Company A produces a component used in the production of one of the company’s main products.The costs are budgeted as follows:Amount per unit (R) Amount per 5 000 units (R)Materials 5 25 000Labour 15 75 000Variable overhead 10 50 000Depreciation 4 20 000Allocated general overhead 12 60 000Total cost 46 230 000The components can be purchased from an outside supplier at a cost of R35 per unit.Required:Q.3.2 State five qualitative aspects that the company must evaluate before making a decision in Q.3.1 above.Q.3.3 Briefly explain the difference between avoidable costs, differential costs and opportunity costs. Provide one example of each cost.Q.3.4 List two examples of scenarios where relevant costing can be used effectively in decision‐making.Jingga Sdn Bhd has three production departments - Machining, Assembly and Finishing; and two service departments - Maintenance and Store. The company has produced the following budgeted overhead costs for the year 2023: Allocated costs Insurance of Building Insurance of Machinery Rent on factory General supervision Electricity (lighting) Electricity (power Depreciation of Machinery Other information in respect of the departments is as follows: Machining Assembly Finishing Departments Allocated Costs (RM) Value of Machinery (RM) Kilowatt hours Number of employees 36,000 30,000 38,000 20 500 24,000 60,000 12,000 15,000 20,000 40 Area occupied (square meters) Machine hours Direct labour hours Cost of the service departments should be apportioned as follows: Service Departments 600 30,000 30,000 60,000 5,000 12,000 50 800 10,000 30,000 Production Departments Assembly 20% 25% RM 120,000 96,000 30,000 48,000 74,400 18,000 64,800 72,000 Maintenance Store 18,000 Machining department - machine…
- Check n Tioga Company manufactures sophisticated lenses and mirrors used in large optical telescopes. The company is now preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be allocated to the individual product lines from the following information. Lenses Mirrors Units produced Material moves per product line Direct-labor hours per unit 23 23 17 160 160 The total budgeted material-handling cost is $70,840. Required: 1. Under a costing system that allocates overhead on the basis of direct-labor hours, the material-handling costs allocated to one lens would be what amount? 2. Under a costing system that allocates overhead on the basis of direct-labor hours, the material-handling costs allocated to one mirror would be what amount? 3. Under activity-based costing (ABC), the material-handling costs allocated to one lens would be what amount? The cost driver for the…Company Fx Printing and Design has two departments; Designing and Printing department. The estimated costs for both departments is shown as follows: Printing Department RM480,000 Cost Total Designing Department RM360,000 Overhead RM840,000 Direct labor hours Machine hours The actual cost for Company Fx Printing and Design for the month of November 2015 is shown as follows; 880,000 360,000 480,000 400,000 360,000 Printing Department RM36,740 Cost Designing Department RM36,000 40,000 Total Overhead Direct labor hours Machine hours RM72,740 76,000 28,000 36,000 28,000 The company policy for overhead cost based on direct labor hours for Designing Department and machine hours for Printing Department. 1. Calculate the predetermined overhead rate for both departments using plantwide overhead rate. (Assume company use machine hours as the basis). 2. Calculate the predetermined overhead rate for both departments using departmental overhead rate. 3. How much the over/under-applied of overhead…Tioga company manufactures sophisticated lenses and mirrors used in large optical telescopes. The company is now preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be allocated to the individual product lines from the following information. Lenses Mirrors Units produced Material moves per product line 5 Direct-labor hours per unit The total budgeted material-handling cost is 50,000 Required: 1. Under a costing system that allocates overhead on the basis of direct-labor hours, the material-handling costs allocated to one lens would be what amount? 2. Answer the same question as in requirement 1), but for mirrors 3. Under activity-based costing(ABC), the material-handling costs allocated to one lens would be what amount? The cost driver for the material-handling activity is the number of material moves 4. Answer the same question as in requirement 3, but for mirrors. 25 25 15…
- Costing information for Emily Elephant Limited is as follows:Direct material cost per unitDirect labour cost per unitVariable manufacturing overhead cost per unitVariable selling and administrative overhead cost per unitFixed manufacturing overhead for the year£41 £43£6£4£44,000Budgeted production for the year was 4,000 units. What is the budgeted unit product cost according to an absorption costing system? a. £90 b. £101 c. £105d. £94Mike. Inc has two products A and B. The budgeted fixed manufacturing overhead is $10,000. The departmentis expected to work in full capacity. It plans to use cost-based pricing by using the absorption method. Assumethe firm can produce and sell 1,000 units Product A and 1,000 units Product B. Product A Product BDirect Materials $3 $2Direct Labor $1 $3Variable Manufacturing Overhead $2 $1Budgeted labor hours used for each unit product 1 4Budgeted machine hours used for each unit product 3 1Sale Demand 1,000 1,000 Product A…Abam Bakery Enterprise is a small bakery manufacturer located at Ipoh, Perak. Currently, Abam Bakery produces three types of product – brownies, cupcakes and filing donuts. There are three production departments. Departmental information on budgeted overhead and various activity measures for the coming year is as follows: Mixing Cooking Packaging Estimated overhead RM300,000 RM150,000 RM220,000 Direct labor hours 4,500 15,000 3,200 Direct labor cost RM120,000 RM180,000 RM120,000 Machine hours 8,000 2,000 5,000 Currently, overhead is applied on the basis of machine hours using a plantwide rate. However, the production supervisor, Miss Lily, has been wondering whether it might be worthwhile to use departmental overhead rates. She has analysed the overhead costs and drivers for the various departments and decided that Mixing and Packaging should base their overhead rates on machine hours and that Cooking should base its overhead…
- Mike. Inc has two products A and B. The budgeted fixed manufacturing overhead is $10,000. The departmentis expected to work in full capacity. It plans to use cost-based pricing by using the absorption method. Assumethe firm can produce and sell 1,000 units Product A and 1,000 units Product B. Product A Product BDirect Materials $3 $2Direct Labor $1 $3Variable Manufacturing Overhead $2 $1Budgeted labor hours used for each unit product 1 4Budgeted machine hours used for each unit product 3 1Sale Demand 1,000 1,000 Product A Product BRequired Investment…Mike. Inc has two products A and B. The budgeted fixed manufacturing overhead is $10,000. The departmentis expected to work in full capacity. It plans to use cost-based pricing by using the absorption method. Assumethe firm can produce and sell 1,000 units Product A and 1,000 units Product B. Product A Product BDirect Materials $3 $2Direct Labor $1 $3Variable Manufacturing Overhead $2 $1Budgeted labor hours used for each unit product 1 4Budgeted machine hours used for each unit product 3 1Sale Demand 1,000 1,000 Product A Product BRequired Investment…Blue-Pool Company is an electric utility which has two service departments, Accounting and Maintenance. It also has two operating departments, Generation and Transmission. Maintenance Department costs are allocated based on maintenance hours of service. Accounting Department costs are allocated based on accounting hours of service provided. Budgeting costs and other data for the following year are as follows: Accounting Maintenance Generation Transmission Budgeted costs R100 000 R200 000 R600 000 R400 000 Maintenance hours of service 600 7 200 4 800 Accounting hours of service 500 2 000 4 500 3 500 The step method is used to allocate service department costs, with the accounting department being allocated first. Calculate the amount of accounting department costs that needs to be allocated to the generation department. A. R42 860 B. R38 000 C. R57 143 D. R45…