A company plans to process 1000kg of a certain material costing ksh. 100 per kg through one process. Toprocess these units the company will incur conventional tests which include; labour ksh.200000Production overhead ksh.100000It's usually the company's policy to provide a normal wastage of 10% of input for the scrap units are alwayssold at ksh.50 per kg. At the end of the process the company realises that all loses were at the normal leveland there were no opening and closing work in progress.Required; process account for appropriate accounts

Process account shows all the costs incurred in the process. It includes the cost of material,…

Answered: A company plans to process 1000kg of a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Snipe Company has been purchasing a component, Part Q, for $19.20 a unit. Snipe is currently operating at 70% of capacity and no significant increase in production is anticipated in the near future. The cost of manufacturing a unit of Part Q, determined by absorption costing methods, is estimated as follows: Direct materials $11.50 Direct labor $4.50 Variable factory overhead $1.12 Fixed factory overhead $3.15 Total $20.27 Prepare a differential analysis report, dated March 12 of the current year, on the decision to make or buy Part Q.
Concord Corporation can produce 100 units of a necessary component part with the following costs: Direct Materials $23000 Direct Labor 9000 Variable Overhead Fixed Overhead 25000 O $50000 O $57000 O $62000 O $64000 12000 If Concord Corporation purchases the component externally, $5000 of the fixed costs can be avoided. Below what external price for the 100 units would Concord choose to buy instead of make the units?
Edidas Company needs 20,000 units of Part GX to use in producing one of its products. If Edidas buys the Part GX from McMillan Company for $79 instead of making it, Edidas will not use the released facilities in another manufacturing activity. Twenty percent of the fixed overhead will continue irrespective of CEO Donald Mickey's decision. The cost per unit data are as follows: Cost to make the part Direct Materials Direct Labor (S) 30 15 Variable Overhead 20 Fixed Overhead 20 85 Required : 1. Explain which alternative is more attractive to Edidas, make or buy Part GX. 2. Assume there is new information that Edidas is negotiating to purchase cheaper raw materials from supplier (Twenty percent lower price). Is this information relevant or irrelevant? On the basis of financial considerations alone, should Edidas make or buy Part GX? Show your calculations 3. Based on requirement 2, what are relevant qualitative factors that Edidas should consider to decide whether to make or buy Part GX?…
Swifty's Manufacturing Company can make 100 units of a necessary component part with the following costs: Direct Materials Direct Labor Variable Overhead Fixed Overhead $117000 22000 49000 30000 If Swifty's Manufacturing Company purchases the component externally, $20000 of the fixed costs can be avoided. What is the maximum amount Swifty is willing to pay to purchase the 100 units? $218000 O $188000 $198000 $208000
s
Company A manufactures two products A and B that sells for 120 € and 80 € respectively. Each product uses only one type of raw materials that costs € 6 per kilogram. The company has the capacity to annually produce 100,000 units of each product. The company considers its traceable fixed mahufacturing overhead to be avoidable and its common fixed expenses are unavoidable and have been allocated to products based on sales in euros. The Company's average cost per unit for each product at the annual level of activity is provided in the table. Items Product costs in euro A B Direct materials 30 12 Direct labor 20 15 Variable manufacturing overhead 7 5 Traceable fixed manufacturing overhead 16 18 Variable selling expenses 12 8 Common fixed expenses 15 10 Total costs per unit 100 68 (Answer each question independently unless instructed otherwise) Assume that the Company expects to produce and sell 90000 units of product B during the current year. A new customer…
oncorde Ltd has been asked to quote a price for an order of 8 units of Product Delta. Making this product will require skilled labour, which is currently in hort supply and is paid £15 an hour. If the order is accepted, all necessary labour will have to be transferred from existing work. As a result, other orders will be lost. It is estimated that for each hour transferred to this contract £45 will be lost (calculated as lost sales revenue £75, less materials £15 and labour 15). The production manager believes that, owing to a learning process, the time taken to make each unit will reduce, from 20 hours to make the first one, by one hour a unit made. (That is 20 hours to make the first one, 19 hours to make the second, 18 hours to make the third one and so on.) What is the total relevant cost of skilled labour for the purposes of the order? The relevant cost for skilled labour will be will be £. ... Time Remaining: 00:43:50 Next
A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 19,000 defective units that cost $5.20 per unit to manufacture. The units can be a) sold as is for $2.60 each, or b) reworked for $4.80 each and then sold for the full price of $7.80 each. What is the incremental income from selling the units as scrap and reworking and selling the units? Should the company sell the units as scrap or rework them? (Enter costs and losses as negative values.) Incremental income (loss) The company should: Sale as Scrap $ 0 $ Rework
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Himalayan Engineering Works currently takes four days to convert the raw material and components to finished goods. The firm is considering in buying a set of new machines which will reduce the conversion time to 1.5 days. If the firm decides to buy the machines, how does this decision affect the working capital requirement? Working Capital requirement will increase Working Capital requirement will decrease No change in working capital requirement Change in conversion time has no relationship with working capital requirement

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