Management Accounting

Management Accounting ACC107

Individual Assignment

Asma Moosa 30624 Diploma In Business Sem 4

c)
Overhead absorption rate= OAR/ ORR
Smoothing= 12663.5/10000
= $1.27
Shaping = 31362.5/25000
= $ 1.25
Fixing = 20471.75/5000
= $ 4.09

Question 2
a)Total Selling Overheads
Variable selling overhead= 6000*18.75
=112500
Fixed selling overhead = 100000
Total selling overhead = 100000+112500= 212500

b) i) Marginal Costing
Revenue (200*10000)

2000000
Opening Inventory(84*2000)
168000

COST OF PRODUCTION

Direct Material(60*10000)
600000

Direct Labor(20*20000)
200000

Variable Manufacture OH (4*10000)
40000

1008000

_ Closing Inventory(84*10000)
(1680000)

840000

+Variable Selling OH (4*100000)
187500
(1027500)

972500
Less Fixed Cost

Fixed manufacturer OH
300000

Fixed Selling OH
150000

Fixed Administration OH
100000
(550000)

422500

ii) Absorption Costing

Revenue

2000000
Cost of sales

Opening Inventory(2000*119)
238000

Direct material
300000

Direct Labor
600000

Variable manufacturing OH
40000

1378000

Less closing inventory
228000

(1150000)
Gross Profit

850000
Less Non-manufactured Expenses

Variable selling cost
187500

Fixed selling cost
150000

Fixed administration cost
100000

(437500)
Net Profit

412500

Question 3
a)
Details
Oct
Nov
Dec
Jan
Class A

Sep, Sales 120*55/100
0
66000
30000
18000
Oct, Sales 160*55/100
0
0
88000
40000
Nov, Sales 220*55/100
0
0
0
121000

Class B

Sep, Sales 80*65/100
52000
16000
8000
-
Oct, Sales 100*65/100
0
65000
20000
10000
Nov, Sales 60*65/100
0
0
39000
12000
Total
52000
147000
185000
201000

b)High-low Method
A technique used to determine the variable rate (slope of a total cost line) of an independent variable and the fixed amount by using just two points: the highest point and the lowest point. For example, if at the highest volume of processing items there were 10,000 items processed at a total cost of $35,000 and at the lowest volume there were 6,000 items