DPA20193 BASIC COST ACCOUNTING, CHAPTER 6 145 QUESTION 7 Complete the following information Costs 6,000 units 8,000 units Types of costs RM RM Example: Depreciation 25,500 25,500 Fixed Direct Labour 12,000 16,000 Factory rental 14,000 Fixed Direct material 3,000 Variable Factory overhead 9,000 10,000 Sales commission 1,200 1,600 Supervisor salary 6,600 Fixed Water and electricity 4,400 5,200 QUESTION 8 Thunder Cat Company uses flexible budget to evaluate their performance. The company uses labor hour as a basic tools to calculate the production overhead. Below is the complete information for company’s production overhead: Fixed cost Variable cost for standard labor hour RM RM Indirect labor 9,000 21,000 Supply 12,000 16,000 Utilities 7,500 13,000 Depreciation 18,000 - Maintenance 5,500 6,000 For the year 2004, the company has recorded 20,000 standard labor hour.
DPA20193 BASIC COST ACCOUNTING, CHAPTER 6 146 At the end of the year, the company realized that the actual labor hour is 15 000 hours. Actual cost is as follows: Variable cost Fixed cost RM RM Indirect labor 10,000 8,000 Supply 11,500 13,000 Utilities 9,000 10,000 Depreciation 15,000 15,000 Maintenance 7,500 7,500 (a) Prepare flexible budget for three level activity of 14 000, 15 000, and 16 000 direct labour hour. (b) Prepare Performance Report for the year ended 2004. QUESTION 9 The managements of Farginny Enterprise had just realized about the advantages of using flexible budget in planning and controlling the company performance. Thus the management had decided to prepare a flexible budget by using flexible budgeting approach. The followings are information collected for two levels of operation: Levels of production 70% 80% = 300,000 units RM RM Direct material 65,625 75,000 Direct labor 52,500 60,000 Manufacturing overhead 13,125 15,000 Electricity 2,625 3,000 Royalty 7,625 8,000 Commission 10,375 11,500 Supervision 10,000 10,000 Depreciation 20,000 20,000 Salaries 12,000 12,000 Rates 5,000 5,000
DPA20193 BASIC COST ACCOUNTING, CHAPTER 6 147 Additional information; i) Budgeted selling price = RM 3.00/unit ii) Actual selling price = RM 2.70/unit For the year ended 2010, the actual cost of production is as follow: Levels of production 85% RM Direct material 78,000 Direct labor 62,500 Manufacturing overhead 15,850 Electricity 3,200 Royalty 8,100 Commission 12,000 Supervision 10,000 Depreciation 20,000 Salaries 13,500 Rates 6,000 You are required to prepare; (a) A flexible budget statement for 60% and 85% levels of activity. (b) A performance report for the year ended 2010. QUESTION 10 Saffura Sdn. Bhd. manager asked you to provide flexible budget for the company. Below is the information of the company: (i) Budgeted unit at 75% is 15,000 units. (ii) Budgeted selling price per unit is RM27.00. (iii) Actual selling price per unit is RM25.00. (iv) Below is the information on the budgeted costs at 60% and 70%.
DPA20193 BASIC COST ACCOUNTING, CHAPTER 6 148 Level of production (%) 60% 70% Raw material 90,000 105,000 Labour 60,000 70,000 Administrative expenses 45,000 52,500 Overhead 36,000 42,000 Other operating expenses 24,000 28,000 (v) The actual costs of the company for the year ended 2010 are as follow: Items 80% Raw material 121,600 Labour 78,400 Administrative expenses 59,200 Overhead 48,000 Other operating expenses 28,800 You are required to prepare: (a) Flexible budget for 80% and 90% level of production. (b) Performance report for the year ended 2010 (show the variance). QUESTION 11 North Shine Car Wash had the following incomplete flexible budget. North Shine Car Wash Flexible Budget Statement for the year ended 31 December 20XX Levels of activity 7,000 9,000 Variable costs; Car wash liquid Electricity Maintenance Costs per unit ? ? ? ? ? ? 14,400 5,400 3,600 Total variable costs ? ? ? Fixed cost: Salaries and wages ? 9,000
DPA20193 BASIC COST ACCOUNTING, CHAPTER 6 149 Depreciation Rent ? ? 6,000 8,000 Total fixed costs ? ? Total costs ? ? (a) Copy the above flexible budget statement and complete the missing figures. (b) Given that during the year ended 31 December 20XX the company manage to wash 8,900 of cars and the actual cost incurred are as follow: Items RM Variable costs; Car wash liquid Electricity Maintenance 14,160 4,920 3,100 Total variable costs 22,180 Fixed cost Salaries and wages Depreciation Rent 9,100 7,000 8,000 Total fixed costs 24,100 Total costs 46,280 You are required to prepare performance report for the company.
DPA20193 BASIC COST ACCOUNTING, CHAPTER 6 150 QUESTION 12 Nuwara Sdn. Bhd. manufactures trophies for schools in Kinabatangan. Below is the information of the company: (i) Budgeted total sales at 56% level of activity is RM190,000. (ii) Actual total sales at 56% level of activity is RM185,000. (iii) Below is the information on the budgeted costs at 50% and 60%. Level of production (%) 50% 60% Raw material 50,000 60,000 Labour 40,000 48,000 Administrative expenses 30,000 36,000 Overhead 20,000 24,000 Fixed cost 14,000 14,000 (iv) The actual costs of the company for the year ended 2013 are as follow: Items 56% Raw material 67,200 Labour 56,000 Administrative expenses 22,500 Overhead 15,000 Fixed cost 14,000 You are required to: (a) Prepare flexible budget for 56% level of production. (b) Provide performance report for the year ended 2013 (show the variance).
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