User Account

All Pages

budget costing, Managerial Accounting

Assignment Help:
Archie Ltd manufactures a product called Gizmo. It uses the following direct inputs:
Price Quantity Cost per unit of output
Direct materials $4 per gram 10 grams per unit $40 per unit
Direct manufacturing labour-hours (DMLH) $15 per DMLH 2 DMLH per unit $30 per unit


Archie Ltd has no direct materials inventory. All manufacturing overhead costs are variable costs.

The manufacturing overhead cost is comprised of two activities: set-up and operations. The cost driver for set-up is set-up hours and the cost driver for operations is direct manufacturing labour-hours. Archie Ltd allocates set-up cost at a rate of $80 per set-up hour and each set-up takes two hours.

The company makes Gizmos in batches of 100 units. Operations costs are allocated at a rate of $1.60 per direct manufacturing labour-hour.

Required:

a. Archie Ltd plans to make and sell 20 000 Gizmos in the first quarter of next year. The selling price for the product is $120.Prepare the revenue budget for the first quarter.
b. Prepare the direct material usage budget for the first quarter of next year.
c. Prepare the direct manufacturing labour usage budget for the first quarter of next year.
d. Prepare the manufacturing overhead cost budget for each activity for the first quarter of next year.
e. Compute the budgeted unit cost of a gizmo for the first quarter of next year.
f. Prepare the cost of goods sold budget for the first quarter of next year. Assume Archie Ltd budgets 1000 units of beginning finished goods inventory at a cost of $72 per unit. The company uses the FIFO cost flow assumption for finished goods inventory. It expects to sell all 20 000 Gizmos made in the first quarter.
g. Calculate the budgeted gross margin for the first quarter of next year.
h. The company’s managers want to implement Kaizen Costing. They budget a 1% decrease in materials quantity and direct manufacturing labour-hours and a 3% decrease in set-up time per unit for each subsequent quarter. Calculate the budgeted unit cost and gross margin for quarters two and three. Assume no change in the budgeted output.
i. Refer to the above requirement. How could the reduction in materials and time be accomplished? Are there any problems with this plan?

Related Discussions:- budget costing

Compounding technique, What does compounding technique shows?

What does compounding technique shows?

English, accounting process or accounting cycle

accounting process or accounting cycle

Transfer pricing , Western States Supply, Inc. (WSS), consists of three div...

Western States Supply, Inc. (WSS), consists of three divisions—California, Northwest, and Southwest—that operate as if they were independent companies. Each division has its own sa

List the advantages of program based budgeting, Question: (a) "Budgeta...

Question: (a) "Budgetary control comprises two distinct elements - Planning and Control''. ‘'A budget is a statement of what it is reasonable to believe can be made to ha

What are the advantages of contributionmargin analysis, What are the Advant...

What are the Advantages of contributionmargin analysis the concept of contribution is variable aid to management in making managerial decisions . a few benefits resulting from

What are the disadvantages of budgetary control, What are the Disadvantages...

What are the Disadvantages of budgetary control 1) Uncertain future: the budgets are prepared for the future period. Despite best estimates made for the predictions may not

Gathering data-plotting graph-cost estimating relationship, Gather data con...

Gather data concerning the relationship among the dependent and independent variables Collecting data is generally the most hard and time-consuming element of CER development.

Illustration of coefficient of determination , Illustration of Coefficient ...

Illustration of Coefficient of Determination The production manager of XYZ Company is concerned about the apparent fluctuation in efficiency and wants to determine how labour c

Interoperate loans and deposits, In the current corporate world, this is a ...

In the current corporate world, this is a common practice of companies along with surplus cash to lend to another company for a short period generally ranging from 60 days to 180 d

Assigment, taking the role of a consultant, discuss the factors you would c...

taking the role of a consultant, discuss the factors you would consider in selecting a suitable accounting system solutio for a small to medium enterprise. i has to be 1200 q\work

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd