Management Accounting and Control Test Solution
Solution maf420
Question 1
a) Kettle : 3000 unit per month : 1,500 kg of Material L
Rice cooker : 1000 unit per month : 1,500 kg of Material L
So, the ratio is 1:3. If the company wishes to fulfill all the targeted kettle produce, therefore they should use all the material available to produce rice cooker for produce that component.
From here, we can conclude that, the company need to scarified 1000 unit of rice cooker to produce 3000 unit of kettle.
The total contribution lost is….
From a view of rice cooker :
RM
Revenue (RM250x1000unit)
250, 000
Total cost (RM228x1000unit)
228, 000
Profit
22,000
From a view of kettle :
The total contribution lost is RM 22, 000 + RM 21, 000 = RM 43, 000
b) Make or continue buy
Total cost of making
Associated units making:
Total cost of buying
Associated units buying:
The component RM 95 x 3000 unit RM285, 000
The decision is buy because cost of savingRM79, 000 (RM 346,000 – RM285, 000).
Working 1
1 unit of kettle – 3 hours
3000 unit of kettle – 9000 hours
Working 2
3 unit of kettle – stop 1 unit of rice cooker
3000 of kettle – 1000 of rice cooker
Contribution = sales – cost = RM 250 – RM 228 = RM 22
a) Make or continue buy
Total cost of making
Associated units making:
Total cost of buying
Associated units buying:
The component RM 95 x 3000 unit RM285, 000
The decision is remain the same as (b) which is buying because cost of saving RM3, 000 (RM 288,000 – RM285, 000).
Working 1
1 unit of kettle – 3 hours
3000 unit of kettle – 9000 hours
Working 2
3 unit of kettle – stop 1 unit of rice cooker
3000 of kettle – 1000 of rice cooker
Contribution = sales – cost = RM 250 – RM 228 = RM 22
Question 2
a) The first alternative methods of investment appraisal that Tegas Sdn Bhd can use to evaluate the proposed
Question 1
a) Kettle : 3000 unit per month : 1,500 kg of Material L
Rice cooker : 1000 unit per month : 1,500 kg of Material L
So, the ratio is 1:3. If the company wishes to fulfill all the targeted kettle produce, therefore they should use all the material available to produce rice cooker for produce that component.
From here, we can conclude that, the company need to scarified 1000 unit of rice cooker to produce 3000 unit of kettle.
The total contribution lost is….
From a view of rice cooker :
RM
Revenue (RM250x1000unit)
250, 000
Total cost (RM228x1000unit)
228, 000
Profit
22,000
From a view of kettle :
The total contribution lost is RM 22, 000 + RM 21, 000 = RM 43, 000
b) Make or continue buy
Total cost of making
Associated units making:
Total cost of buying
Associated units buying:
The component RM 95 x 3000 unit RM285, 000
The decision is buy because cost of savingRM79, 000 (RM 346,000 – RM285, 000).
Working 1
1 unit of kettle – 3 hours
3000 unit of kettle – 9000 hours
Working 2
3 unit of kettle – stop 1 unit of rice cooker
3000 of kettle – 1000 of rice cooker
Contribution = sales – cost = RM 250 – RM 228 = RM 22
a) Make or continue buy
Total cost of making
Associated units making:
Total cost of buying
Associated units buying:
The component RM 95 x 3000 unit RM285, 000
The decision is remain the same as (b) which is buying because cost of saving RM3, 000 (RM 288,000 – RM285, 000).
Working 1
1 unit of kettle – 3 hours
3000 unit of kettle – 9000 hours
Working 2
3 unit of kettle – stop 1 unit of rice cooker
3000 of kettle – 1000 of rice cooker
Contribution = sales – cost = RM 250 – RM 228 = RM 22
Question 2
a) The first alternative methods of investment appraisal that Tegas Sdn Bhd can use to evaluate the proposed