Problem 5 A proforma cost sheet of a company provides the following particulars: Elements of Cost Amt. Per Unit (Rs.) Raw Materials 140 Direct Labours 60 Overheads 70 Total Cost 270 Profit 30 Selling Price 300 Further particulars available are: Raw materials are in stock on an average for one month. Materials are in process on an average for half a month. Finished goods are in stock on an average for one month. Credit allowed by suppliers is one month- credit allowed to customers is two months. Lag in payment of wages is 1.5 weeks. Lag in payment of overhead expenses is one month. One fourth of the output is sold against cash. Cash in hand and at bank is expected to be Rs. 50,000. You are required to prepare a statement showing the working capital needed to finance, a level of activity of 2,40,000 units of production. You may assume that production is carried on evenly throughout the year; wages and overhead accrue similarly and a time period of 4 weeks is equivalent to a month. Note: Year - 4x12 - 48 weeks

Problem 5 A proforma cost sheet of a company provides the following particulars: Elements of Cost Amt. Per Unit (Rs.) Raw Materials 140 Direct Labours 60 Overheads 70 Total Cost 270 Profit 30 Selling Price 300 Further particulars available are: Raw materials are in stock on an average for one month. Materials are in process on an average for half a month. Finished goods are in stock on an average for one month. Credit allowed by suppliers is one month- credit allowed to customers is two months. Lag in payment of wages is 1.5 weeks. Lag in payment of overhead expenses is one month. One fourth of the output is sold against cash. Cash in hand and at bank is expected to be Rs. 50,000. You are required to prepare a statement showing the working capital needed to finance, a level of activity of 2,40,000 units of production. You may assume that production is carried on evenly throughout the year; wages and overhead accrue similarly and a time period of 4 weeks is equivalent to a month. Note: Year - 4x12 - 48 weeks

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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W A Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 40,000 units per month is as follows: Direct Materials.. $18.00 Direct Labor... Variable Manufacturing OH... Fixed Manufacturing OH. Variable S&A... Fixed S&A.. $6.80 Q. What is the minimum price A. $ $1.90 $5.10 $2.40 $11.60 The normal selling price of the product is $49.1 per unit. (16 An order has been received from an overseas customer for 1,000 units to be delivered this month at a special discounted price. This order would not change the total amount of the Company's fixed costs. The variable selling and administrative expense would be $0.10 less per unit on this order than on normal sales. Direct labor is a variable cost in this company. Suppose there is not enough idle capacity to produce all the units for the overseas customer and accepting the special order would require cutting back on production of 100 units for regular…
00:35 1 @ O Problem 5 A proforma cost sheet of a company provides the following particulars: Elements of Cost Amt. Per Unit (Rs.) Raw Materials 140 Direct Labours 60 Overheads 70 270 Total Cost Profit Selling Price Further particulars available are: 30 300 Raw materials are in stock on an average for one month. Materials are in process on an average for half a month. Finished goods are in stock on an average for one month. Credit allowed by suppliers is one month - credit allowed to customers is two months. Lag in payment of wages is 1.5 weeks. Lag in payment of overhead expenses is one month. One fourth of the output is sold against cash. Cash in hand and at bank is expected to be Rs. 50,000. You are required to prepare a statement showing the working capital needed to finance, a level of activity of 2,40,000 units of production. You may assume that production is carried on evenly throughout the year, wages and overhead accrue similarly and a time period of 4 weeks is equivalent to a…
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Question 1: The following information relating to production and mixed costs are extracted from the book of a manufacturing fırm: Months Production (Units) Mixed costs January 6,800 $31,580 February 6,400 $30,420 March 7,200 $32,740 April 8,000 $35,060 May 6,600 $31,000 June 7,000 $32,160 Requirements: 1. Using high and low method, estimate the variable cost per unit and the fixed costs elements from the above information 2. Express the variable and fixed costs in the form Y=a+bx
Cost Classification Discussion Question The table below shows monthly data collected on production costs and on the number of units produced over a twelve month period. Month Total Production Costs Level of Activity (Units Produced) July $230,000 3,500 August 250,000 3,750 September 260,000 3,800 October 220,000 3,400 November 340,000 5,800 December 330,000 5,500 January 200,000 2,900 February 210,000 3,300 March 240,000 3,600 April 380,000 5,900 May 350,000 5,600 June 290,000 5,000 Determine the variable cost per unit and the fixed cost using the high-low method. What is the equation of the total mixed cost function? Based on the High-Low method, what is the total production costs if 6,500 units are produced? Prepare the scatter diagram and insert the trendline or line of best-fit. Use a scale of 2 cm to represent 1,000 units on the x-axis & 2 cm to represent…
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QUESTION 2 A factory's records show the following costs and outputs for the last five months: Month |January February March Cost (£) 17,125 Output 650 17,800 940 April May 18,650 17,980 18,760 1,260 990 1,150 Using the High - Low method to calculate, what wouid the cost be of producing 1,000 units? O a. E15,500.00 Ob.E17,958.40 Oc £18,000.00 d. E18,269.50
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The Cost Sheet of Picon Sales Corporation provides the following information: Cost per Particulars unit (Rs.) Raw Material 250 Direct Labour 400 Overheads (including 100 Depreciation Rs. 50/-) Total Cost 750 Profits 250 Selling Price 1000 Avg. raw material stock is of one month. Avg. work in progress is for half month. Credit period allowed by suppliers is one month and to customers is also one month. Avg. time lag in payment of wages is 10 days and overheads is 30 days. 25% of the sales are on cash basis. Finished goods lie in stock for one month. Cash balance at the beginning is expected to be Rs. 200,000. You are required to prepared a statement of the working capital needed to finance a level of the activity of 54,000 units of output. Production is carried out evenly throughout the year and wages and overheads accrue similarly. Please state your assumptions, if any.
Assume the following information appears in the standard cost card for a business that makes only one product: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 5 pounds $ 11.00 per pound $ 55.00 Direct labor 2 hours $ 17.00 per hour $ 34.00 Variable manufacturing overhead 2 hours $ 3.00 per hour $ 6.00 During the most recent period, the following additional information was available: 20,000 pounds of material was purchased at a cost of $10.50 per pound. All of the material that was purchased was used to produce 3,900 units. 8,000 direct labor-hours were recorded at a total cost of $132,000. The actual variable overhead cost incurred during the period was $25,000. Assuming a business uses direct labor-hours to compute its predetermined overhead rate, what is the variable overhead spending variance? Multiple Choice $1,600 F $1,600 U $1,000 U $1,000 F