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The following cost details relate to one unit of product Zen. (£) Variable materials Variable labour Variable production overheads Fixed production overhead Variable selling overhead Fixed selling overhead Total cost 20.40, 18.20, 3.60 ,25.88 ,15.58 ,7.56 ,91.22 In a marginal costing system, what would the value of a closing inventory of 5,000 units of product Zen be?

The following cost details relate to one unit of product Zen. (£) Variable materials Variable labour Variable production overheads Fixed production overhead Variable selling overhead Fixed selling overhead Total cost 20.40, 18.20, 3.60 ,25.88 ,15.58 ,7.56 ,91.22 In a marginal costing system, what would the value of a closing inventory of 5,000 units of product Zen be?

FINANCIAL ACCOUNTING
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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The following cost details relate to one unit of product Zen. (£)

Variable materials
Variable labour
Variable production overheads Fixed production overhead Variable selling overhead Fixed selling overhead
Total cost

20.40, 18.20, 3.60 ,25.88 ,15.58 ,7.56 ,91.22

In a marginal costing system, what would the value of a closing inventory of 5,000 units of product Zen be?

ARDEN ARDEN ENIVERSITY ENIVERSITV 4. 6. Which of the following describes decision making at the tactical or functional level? Rangers plc is preparing its production budget for product A for the forthcoming year. Budgeted sales for product D are estimated to be 4,800 units. a) Senior management will need to make long-term decisions about the future of the whole business. Therefore, strategic decisions will be made about which markets the business is to operate in, whether to bid to take Opening inventories are 450 units and the company wants to reduce its inventories by 12% by the end of the year. over a competitor, etc. b) These decisions focus largely on the day-to-day running of the business and may be made by lower-level managers, say at the branch level. They may concern inventory levels, staffing rotas, etc. c) None of the above. The budgeted number of units of product D to be produced is, a) b) 5,250 units 4,350 units 4,296 units d) These decisions are made in focusing on the medium-term future of the business, say looking at the 12-18-month pricing strategy for a product, deciding what products to stock over the summer months, etc. They tend to be focused on particular business units or departments. c) d) 4,746 units 5. 7. The following cost details relate to one unit of product Zen. Dakota Co. has prepared the following flexible budget for the coming year. The budgeted level of activity is 5,000 units. (£) Variable materials 20.40 18.20 3.60 £ Variable labour Sales Direct material Variable production overheads Fixed production overhead Variable selling overhead Fixed selling overhead Total cost 25.88 15.58 Z.56 91.22 Direct labour Variable overheads Fixed overheads Profit 125,000 37,500 30,000 15,000 20,000 22,500 In a marginal costing system, what would the value of a closing inventory of 5,000 units of product Zen be? If the budget is flexed to a level of activity of 7,500 units, what would be the budgeted total costs be? a) b) c) d) £288,900 £211,000 £193,000 £456,100 a) b) c) d) £102.500 £110,000 £143,750 £126,000 Page 4 of 16 [88] Page 5 of 16 [88]
Transcribed Image Text:ARDEN ARDEN ENIVERSITY ENIVERSITV 4. 6. Which of the following describes decision making at the tactical or functional level? Rangers plc is preparing its production budget for product A for the forthcoming year. Budgeted sales for product D are estimated to be 4,800 units. a) Senior management will need to make long-term decisions about the future of the whole business. Therefore, strategic decisions will be made about which markets the business is to operate in, whether to bid to take Opening inventories are 450 units and the company wants to reduce its inventories by 12% by the end of the year. over a competitor, etc. b) These decisions focus largely on the day-to-day running of the business and may be made by lower-level managers, say at the branch level. They may concern inventory levels, staffing rotas, etc. c) None of the above. The budgeted number of units of product D to be produced is, a) b) 5,250 units 4,350 units 4,296 units d) These decisions are made in focusing on the medium-term future of the business, say looking at the 12-18-month pricing strategy for a product, deciding what products to stock over the summer months, etc. They tend to be focused on particular business units or departments. c) d) 4,746 units 5. 7. The following cost details relate to one unit of product Zen. Dakota Co. has prepared the following flexible budget for the coming year. The budgeted level of activity is 5,000 units. (£) Variable materials 20.40 18.20 3.60 £ Variable labour Sales Direct material Variable production overheads Fixed production overhead Variable selling overhead Fixed selling overhead Total cost 25.88 15.58 Z.56 91.22 Direct labour Variable overheads Fixed overheads Profit 125,000 37,500 30,000 15,000 20,000 22,500 In a marginal costing system, what would the value of a closing inventory of 5,000 units of product Zen be? If the budget is flexed to a level of activity of 7,500 units, what would be the budgeted total costs be? a) b) c) d) £288,900 £211,000 £193,000 £456,100 a) b) c) d) £102.500 £110,000 £143,750 £126,000 Page 4 of 16 [88] Page 5 of 16 [88]
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