Reference no: EM131762814

The Principles of Cost Accounting Assignment Tasks

Task 1 - Find the financial operational result using the variable costing according to given data:

- Fixed manufacturing cost - 25 000 €

- Standard (normal) volume of manufactured products during one year - 16 000 units

- Variable cost - 14 € per unit

- Price - 18  € per unit

Specification	I quarter of a year	II quarter of a year	III quarter of a year	IV quarter of a year
Beginning inventory	0
Production (units)	4 100	4 000	3 800	4 200
Sale (units)	4 000	4 000	3 600	4 000
Ending inventory (closing inventory)

 

Specification		I	II	III	IV
1)	Revenue
2)	Variable manufacturing costs
3)	Beginning inventory
4)	Ending inventory
5)	Variable cost of goods sold
6)	Contribution margin
7)	Fixed cost
8)	Operating income

Task 2 & 3 - KET Co. manufactures two types of metal kettles: A and B in two production departments: Machining and Painting. The company's production output and sales quantities and other basic data for current year are below:

Specification	Kettle A	Kettle B
Annual production and sales (units)	140 000	120 000
Direct material (zl per unit)	60	70
Direct labor hours per unit in Machining Department	1	1
Direct labor hours per unit in Painting Department	2	3
Direct labor hour rate (zl per unit)	13	17
Machine time in Machining Department (hours per unit)	1	2

Budgeted overhead costs in both departments are as follows:

• Machining Department 1 600 000 zl,
• Painting Department 1 200 000 zl.

The following activities and cost drivers have been identified:

Activity	Overhead cost (zl)	Quantity of cost driver	Budgeted level of cost driver
			Kettle A	Kettle B
Machine set-ups	85 000	850 set-ups	500	350
Material handling	650 000	650 000 kg of material	200 000	450 000
Paint working	2 000 000	500 000 labor hours	250 000	250 000
Quality control	65 000	325 inspections	200	125

Required: Calculate the total production cost per unit each kettle using:

a) Departmental overhead rate using direct machining hours for Machining Department and direct labor hours for Painting department (task 2 - job order costing)

b) Applied overhead rate under activity-based costing system (task 3 - ABC)

Task 4 - The company produces two types of products: A and B, which difference in a weight: A - 2 kilograms [kg], and B - 5 kg. Products are manufactured by the same raw material, in the same production process.

Direct materials	120 000   PLN
Conversion cost	145 300   PLN

 

	Product A		Product B
	Number of units	Percentage of manufacturing	Number of units	Percentage of manufacturing
Costs of current period	300	-	220	-
Work in process at the beginning of the period	80	25%	120	60%

Direct materials are issue at the beginning of the production process.

Required: Find the unit cost of a ready product A and B products as well as the unit cost of work in process.

Task 5 - The company produces the homogeneous product. At the end of current month total costs amounted 140 000€ and were value as follows:

- direct materials 221 000 €

- direct labour 170 000 €

- manufacturing overhead costs 185 000 €.

During the current month,  10 000 units of finished goods were produced and transferred to a storehouse, except 4 000 units which were only partly complete (25% - stage of completion). In previous month entire production was finished.

Required: Establish the unit cost of completed and partly completed products if:

1. Direct materials were issue successfully during the production process.

2. Direct materials were the issue at the beginning of production process.

Attachment:- Assignment File.rar