Class activitiesBlossom 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:RoseLily20,00030,00050,000100,000Direct material (RM)Direct labour (RM)Overheads (RM)TOTAL COST (RM)Production (units)60,00040,00060,000160,000100,000Rose RM20,00040,000All direct labours are paid at RM10 per hour. Total budgeted fixed productionoverheads are RM54,000 and variable overheads are absorbed based on directlabour hour.Outside supplier has offered flower petals of Rose and Lily at purchase price ofRM0.50 per unit each. The following information should be considered if themanagement decides to purchase instead of manufacture the petals.i. The company needs to bear the cost of transportation charges and qualitychecking of RM0. 10 per unit and RM1.00 per unit respectively.ii. Fixed overhead costs will be reduced by the amount as follows:

Lets understand the basics.When management have option either to product goods or purchase from…

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.

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.

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Chapter1: Financial Statements And Business Decisions

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Question

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
20,000
30,000
50,000
100,000
Direct material (RM)
Direct labour (RM)
Overheads (RM)
TOTAL COST (RM)
Production (units)
60,000
40,000
60,000
160,000
100,000
Rose RM20,000
40,000
All direct labours are paid at RM10 per hour. Total budgeted fixed production
overheads are RM54,000 and variable overheads are absorbed based on direct
labour hour.
Outside supplier has offered flower petals of Rose and Lily at purchase price of
RM0.50 per unit each. The following information should be considered if the
management decides to purchase instead of manufacture the petals.
i. The company needs to bear the cost of transportation charges and quality
checking of RM0. 10 per unit and RM1.00 per unit respectively.
ii. Fixed overhead costs will be reduced by the amount as follows:

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