Nt1310 Unit 2 Assignment 2
ACC280
ASSIGNMENT 2
QUESTION 1
JANABIZ Sdn Bhd
Construction in Process account for the year ended 31 December 2012
RM
RM
Material purchased
400,000
plant
10,500
Direct labour paid
250,000
Material transfer to other site
1,000
Sub contractor paid
150,000
prepaid administrative expenses c/d
700
Other direct expenses
25,000
Unused material c/d
4,000
administrative expenses
3,500
material returned to supplier
400
Indirect labour paid
10,000
prepaid indirect labour c/d
500
Hire of crane
8,000
cost of work done to date c/d
882,700
Plant brought to site
20,000
accrued sub contractor expenses c/d
5,000
accrued direct labour c/d
3,000
overhead (W1)
25,300
899,800
899,800
CWDTD b/d
882,700
Contract revenue
916,900
Attributable …show more content…
net profit (W2)
34,200
916,900
916,900
Unused material b/d
4,000
Accrued Direct labour b/d
3,000
prepaid administrative expenses c/d
700
accrued sub contractor expenses b/d
5,000
prepaid indirect labour b/d
500
plant on side b/d
10,500
W1 : production overhead
=
10% x (direct labour + accrued direct labour)
=
10% x (250000 + 3,000)
=
10% x 253,000
=
25,300
W2 :
estimated total contract cost
=
Cost of work done to date + Future additional contract cost
=
882,700 + 80,000
=
962,700
estimated total profit
=
contract price - total estimated contract cost
=
1,000,000 – 962,700
=
37,300
attributable net profit
=
Cost of work done to date x estimated total profit
Estimated total contract cost
=
882,700
x …show more content…
37,300
962,700
=
34,200
ii. Contractee Account
Contractee Account
Progress billing
500,000
cash/bank
375,000
balance c/d
125,000
500,000
500,000
QUESTION 2
1M Bhd
Construction in Process account for the year ended 31 December 2013
RM
RM
Material issued to site
680,000
Material returned to supplier
30,000
Direct wages paid
450,000
Material transfer to other contract
30,000
Accrued direct wages c/d
20,000
Material on site c/d
75,000
Direct expenses paid
75,000
plant on site (200,000 - 50,000) c/d
150,000
Accrued direct expenses c/d
25,000
cost of work done to date c/d
1,015,000
overhead
50,000
1,300,000
1,300,000
Cost of work done to date b/d
1,015,000
Contract revenue
1,647,000
Attributable net profit (W1)
632,000
1,647,000
1,647,000
Material on site b/d
75,000
Accrued direct wages c/d
20,000
Plant on site b/d
150,000
Accrued direct expenses c/d
25,000
W1 : estimated total contract cost
=
Cost of work done to date + Future additional contract cost
=
1,015,000 + 800,000
=
1,815,000
estimated total profit
=
contract price - total estimated contract cost
=
3,000,000 - 1,815,000
=
1,185,000
attributable net profit
=
value of work certified x estimated total profit
contract price
=
1,600,000
x 1,185,000
3,000,000
=
632,000
ii.
Contractee Account
Contractee Account
Progress billing
1,600,000 cash/bank (75% x 1,600,000)
1,200,000
balance c/d (25% x 1,600,000)
400,000
1,600,000
1,600,000
QUESTION 3
a.
BEP (Units)
=
Total fixed cost
Selling price – unit variable cost
=
RM6.00 x 60,000 units
RM40 – (RM15 + RM10 + RM5)
=
RM360,000
RM10
=
36,000 units
BEP (RM)
=
BEP (Units) x Selling Price
=
36,000 units x RM40
=
RM1,400,000
b.
If direct labour increase by RM2.00 per units
New direct labour
=
RM10 + RM2
=
RM12
BEP (Units)
=
Total fixed cost
Selling price – unit variable cost
=
RM6.00 x 60,000 units
RM40 – (RM15 + RM12 + RM5)
=
RM360,000
RM8
=
45,000 units
BEP (RM)
=
BEP (Units) x Selling Price
=
45,000 units x RM40
=
RM1,800,000
c.
MOS (units)
=
Actual sales (units) – BEP (units)
=
60,000 – 36,000
=
24,000 units
d.
Contribution Sales Ratio
=
Unit selling price – unit variable cost
Selling price
=
RM40 – RM30
RM40
=
RM0.25
e.
Sales (units)
=
Fixed cost + Targeted net profit
Contribution margin units
=
RM360,000 + RM20,000
RM40 – RM30
=
38,000 units
f.
New
Selling price (RM40 x 0.8)
=
RM32
Fixed cost (RM6 x 0.8)
=
RM4.80
Variable cost (RM30 x 0.9)
=
RM27
Production volume (60,000 units x 1.40)
=
84,000 units
Net profit
=
Sales revenue – total variable costs – total fixed costs
=
(RM32 x 84,000) – (RM27 x 84,000) – (RM4.80 x 84,000)
=
RM2,688,000 – RM2,268,000 – RM403,200
=
RM16,000
QUESTION 4
a.
i.
Contribution per bottle
=
Unit selling price – Unit variable cost
=
RM120 – RM60
=
RM60
ii.
Contribution
=
Unit selling price – Unit variable cost
Unit selling price
=
RM120 – RM60
RM120
=
0.5 @ 50%
b.
BEP (Units)
=
Total fixed cost
Selling price – unit variable cost
=
RM50,000
RM120 – RM60
=
RM50,000
RM60
=
833 units
BEP (RM)
=
BEP (Units) x Selling Price
=
833 units x RM120
=
RM99,960
c.
MOS (units)
=
Actual sales (units) – BEP (units)
=
2000 – 833
=
1167 units
The margin of safety concept is especially useful when a significant proportion of sales are at risk of decline or elimination, as may be the case when a sales contract is coming to an end. By knowing the amount of the margin of safety, management can gain a better understanding of the risk of loss to which a business is subjected by changes in sales. The opposite situation may also arise, where the margin of safety is so large that a business is well-protected from sales variations.
d.
Sihat Bah Sdn Bhd
Marginal Costing Income Statement for the third quarter of 2013
RM
Sales Revenue
240,000
Less : Variable cost
120,000
Total Contribution Margin
120,000
Less : Total Fixed Cost
50,000
Net Profit
70,000
e.
Sales (units)
=
Fixed cost + Targeted net profit
Contribution margin units
=
RM50,000 + RM150,000
RM120 – RM60
=
3,333 units
ASSIGNMENT 2
QUESTION 1
JANABIZ Sdn Bhd
Construction in Process account for the year ended 31 December 2012
RM
RM
Material purchased
400,000
plant
10,500
Direct labour paid
250,000
Material transfer to other site
1,000
Sub contractor paid
150,000
prepaid administrative expenses c/d
700
Other direct expenses
25,000
Unused material c/d
4,000
administrative expenses
3,500
material returned to supplier
400
Indirect labour paid
10,000
prepaid indirect labour c/d
500
Hire of crane
8,000
cost of work done to date c/d
882,700
Plant brought to site
20,000
accrued sub contractor expenses c/d
5,000
accrued direct labour c/d
3,000
overhead (W1)
25,300
899,800
899,800
CWDTD b/d
882,700
Contract revenue
916,900
Attributable …show more content…
net profit (W2)
34,200
916,900
916,900
Unused material b/d
4,000
Accrued Direct labour b/d
3,000
prepaid administrative expenses c/d
700
accrued sub contractor expenses b/d
5,000
prepaid indirect labour b/d
500
plant on side b/d
10,500
W1 : production overhead
=
10% x (direct labour + accrued direct labour)
=
10% x (250000 + 3,000)
=
10% x 253,000
=
25,300
W2 :
estimated total contract cost
=
Cost of work done to date + Future additional contract cost
=
882,700 + 80,000
=
962,700
estimated total profit
=
contract price - total estimated contract cost
=
1,000,000 – 962,700
=
37,300
attributable net profit
=
Cost of work done to date x estimated total profit
Estimated total contract cost
=
882,700
x …show more content…
37,300
962,700
=
34,200
ii. Contractee Account
Contractee Account
Progress billing
500,000
cash/bank
375,000
balance c/d
125,000
500,000
500,000
QUESTION 2
1M Bhd
Construction in Process account for the year ended 31 December 2013
RM
RM
Material issued to site
680,000
Material returned to supplier
30,000
Direct wages paid
450,000
Material transfer to other contract
30,000
Accrued direct wages c/d
20,000
Material on site c/d
75,000
Direct expenses paid
75,000
plant on site (200,000 - 50,000) c/d
150,000
Accrued direct expenses c/d
25,000
cost of work done to date c/d
1,015,000
overhead
50,000
1,300,000
1,300,000
Cost of work done to date b/d
1,015,000
Contract revenue
1,647,000
Attributable net profit (W1)
632,000
1,647,000
1,647,000
Material on site b/d
75,000
Accrued direct wages c/d
20,000
Plant on site b/d
150,000
Accrued direct expenses c/d
25,000
W1 : estimated total contract cost
=
Cost of work done to date + Future additional contract cost
=
1,015,000 + 800,000
=
1,815,000
estimated total profit
=
contract price - total estimated contract cost
=
3,000,000 - 1,815,000
=
1,185,000
attributable net profit
=
value of work certified x estimated total profit
contract price
=
1,600,000
x 1,185,000
3,000,000
=
632,000
ii.
Contractee Account
Contractee Account
Progress billing
1,600,000 cash/bank (75% x 1,600,000)
1,200,000
balance c/d (25% x 1,600,000)
400,000
1,600,000
1,600,000
QUESTION 3
a.
BEP (Units)
=
Total fixed cost
Selling price – unit variable cost
=
RM6.00 x 60,000 units
RM40 – (RM15 + RM10 + RM5)
=
RM360,000
RM10
=
36,000 units
BEP (RM)
=
BEP (Units) x Selling Price
=
36,000 units x RM40
=
RM1,400,000
b.
If direct labour increase by RM2.00 per units
New direct labour
=
RM10 + RM2
=
RM12
BEP (Units)
=
Total fixed cost
Selling price – unit variable cost
=
RM6.00 x 60,000 units
RM40 – (RM15 + RM12 + RM5)
=
RM360,000
RM8
=
45,000 units
BEP (RM)
=
BEP (Units) x Selling Price
=
45,000 units x RM40
=
RM1,800,000
c.
MOS (units)
=
Actual sales (units) – BEP (units)
=
60,000 – 36,000
=
24,000 units
d.
Contribution Sales Ratio
=
Unit selling price – unit variable cost
Selling price
=
RM40 – RM30
RM40
=
RM0.25
e.
Sales (units)
=
Fixed cost + Targeted net profit
Contribution margin units
=
RM360,000 + RM20,000
RM40 – RM30
=
38,000 units
f.
New
Selling price (RM40 x 0.8)
=
RM32
Fixed cost (RM6 x 0.8)
=
RM4.80
Variable cost (RM30 x 0.9)
=
RM27
Production volume (60,000 units x 1.40)
=
84,000 units
Net profit
=
Sales revenue – total variable costs – total fixed costs
=
(RM32 x 84,000) – (RM27 x 84,000) – (RM4.80 x 84,000)
=
RM2,688,000 – RM2,268,000 – RM403,200
=
RM16,000
QUESTION 4
a.
i.
Contribution per bottle
=
Unit selling price – Unit variable cost
=
RM120 – RM60
=
RM60
ii.
Contribution
=
Unit selling price – Unit variable cost
Unit selling price
=
RM120 – RM60
RM120
=
0.5 @ 50%
b.
BEP (Units)
=
Total fixed cost
Selling price – unit variable cost
=
RM50,000
RM120 – RM60
=
RM50,000
RM60
=
833 units
BEP (RM)
=
BEP (Units) x Selling Price
=
833 units x RM120
=
RM99,960
c.
MOS (units)
=
Actual sales (units) – BEP (units)
=
2000 – 833
=
1167 units
The margin of safety concept is especially useful when a significant proportion of sales are at risk of decline or elimination, as may be the case when a sales contract is coming to an end. By knowing the amount of the margin of safety, management can gain a better understanding of the risk of loss to which a business is subjected by changes in sales. The opposite situation may also arise, where the margin of safety is so large that a business is well-protected from sales variations.
d.
Sihat Bah Sdn Bhd
Marginal Costing Income Statement for the third quarter of 2013
RM
Sales Revenue
240,000
Less : Variable cost
120,000
Total Contribution Margin
120,000
Less : Total Fixed Cost
50,000
Net Profit
70,000
e.
Sales (units)
=
Fixed cost + Targeted net profit
Contribution margin units
=
RM50,000 + RM150,000
RM120 – RM60
=
3,333 units