State four problems which might arise

Assignment Help Managerial Accounting

Reference no: EM133342216

Case: Maindi processing Company Ltd. manufactures a standard product branded Maindimix. Currently, it is operating on a normal activity level of 70% within an output of 6,300 units. The sales director believes that a realistic forecast for the next budget period would be at an activity level of 50%. The following data relates to the forecasted costs of the product for different levels of activity: 60% Sh. 70% Sh. 80% Sh. Direct materials Direct wages Production overheads Administration overheads Selling and distribution overheads Total cost 151,200 64,800 150,400 126,000 169,200 661,900 176,400 75,600 164,800 126,000 176,400 719,200 201,600 86,400 179,200 126,000 183,600 776,800 Profit is 20% of selling price.

Required: i) Flexible budget based on 50% level activity ii) State four problems which might arise from such a change in level of activity

Reference no: EM133342216

Questions Cloud

What policing strategy could you use to control the crime : What policing strategy could you use to control the crime and disorder? What could be changed to improve your recruitment and retention efforts.

Suggest a win-win for both parties : Based on the information in the case study. Suggest a win-win for both parties and write what it is and what they could both say

What policing strategy could use to control the crime : You also believe you're not fully using your social media technology effectively. What policing strategy could you use to control the crime and disorder?

What is the contribution margin and how is it calculated : What are the pros & cons of full and variable costing? In what situations would you prefer the one or the other and why?

State four problems which might arise : Required Flexible budget based on 50% level activity and State four problems which might arise from such a change in level of activity

How to adjust p&l-report which reflects your choices : How to adjust P&L-report which reflects your choices regarding the allocation of the administrative expenses.

Does your companys cash position appear to be improving : Based only on the information in the statements of cash flows, does your company appear to be growing the capacity of its business? Explain

What do you think you would want to be and why : If you chose a career in IT what do you think you would want to be and why? Use examples from class that support your perspective

How does activity-based management help an organization : make dramatic improvements to operations. How does activity-based management help an organization reduce costs and become more efficient

User Account

All Pages