问答题

问答题ALLFIVEquestionsarecompulsoryandMUSTbeattempted

问答题(b)In October the materials mix and yield variances were as follows: Mix: $6,000 adverse Yield: $10,000 favourable The production manager is pleased with the results overall, stating: ‘At the beginning of September I made some changes to the mix of ingredients used for the soaps. As I expected,the mix variance is adverse in both months because we haven’t yet updated our standard cost card but, in both months, the favourable yield variance more than makes up for this. Overall, I think we can be satisfied that the changes made to the product mix are producing good results and now we are able to produce more batches and meet the growing demand for our product.’ The sales manager, however, holds a different view and says: ‘I’m not happy with this change in the ingredients mix. I’ve had to explain to the board why the sales volume variance for October was $22,000 adverse. I’ve tried to explain that the quality of the soap has declined slightly and some of my customers have realised this and simply aren’t happy but no-one seems to be listening. Some customers are even demanding that the price of the soap be reduced and threatening to go elsewhere if the problem isn’t sorted out.’ Required: (i) Briefly explain what the adverse materials mix and favourable materials yield variances indicate about production at Safe Soap Co in October. Note: You are NOT required to discuss revision of standards or operational and planning variances.(4 marks) (ii) Discuss whether the sales manager could be justified in claiming that the change in the materials mix has caused an adverse sales volume variance in October.(3 marks)

问答题

问答题

问答题(b)Explain the reasons why Carad Co would be interested in the material price planning variance and the material price operational variance. (5 marks)

问答题Prepare, on a relevant cost basis, the lowest cost estimate which could be used as the basis for the quotation. Explain briefly your reasons for including or excluding each of the costs in your estimate.(10 marks)

问答题3.Bokco is a manufacturing company. It has a small permanent workforce but it is also reliant on temporary workers,whom it hires on three-month contracts whenever production requirements increase. All buying of materials is the responsibility of the company’s purchasing department and the company’s policy is to hold low levels of raw materialsin order to minimise inventory holding costs. Bokco uses cost plus pricing to set the selling prices for its products oncean initial cost card has been drawn up. Prices are then reviewed on a quarterly basis. Detailed variance reports areproduced each month for sales, material costs and labour costs. Departmental managers are then paid a monthlybonus depending on the performance of their department. One month ago, Bokco began production of a new product. The standard cost card for one unit was drawn up toinclude a cost of $84 for labour, based on seven hours of labour at $12 per hour. Actual output of the product duringthe first month of production was 460 units and the actual time taken to manufacture the product totalled 1,860hours at a total cost of $26,040. After being presented with some initial variance calculations, the production manager has realised that the standardtime per unit of seven hours was the time taken to produce the first unit and that a learning rate of 90% should havebeen anticipated for the first 1,000 units of production. He has consequently been criticised by other departmentalmanagers who have said that, ‘He has no idea of all the problems this has caused. Required:

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问答题NOTE: Clearly state any assumptions and show all workings clearly. Your answer should be structured around the following main headings: turnover; cost of sales; gross profit; indirect expenses; net operating profit. However, in discussing each of these areas you should also refer to the non-financial performance indicators, where relevant. (20 marks)

问答题1.SecureNet(SN)manufacturesecuritycardsthatrestrictaccesstogovernmentownedbuildingsaroundtheworld.Thestandardcostfortheplasticthatgoesintomakingacardis$4perkgandeachcarduses40gofplasticafteranallowanceforwaste.InNovember100,000cardswereproducedandsoldbySNandthiswaswellabovethebudgetedsalesof60,000cards.Theactualcostoftheplasticwas$5·25perkgandtheproductionmanager(whoisresponsibleforallbuyingandproductionissues)wasaskedtoexplaintheincrease.Hesaid‘Worldoilpriceincreasespushedupplasticpricesby20%comparedtoourbudgetandIalsodecidedtouseadifferentsupplierwhopromisedbetterqualityandincreasedreliabilityforaslightlyhigherprice.Iknowwehaveoverspentbutnotalltheincreaseinplasticpricesismyfault’Theactualusageofplasticpercardwas35gpercardandagaintheproductionmanagerhadanexplanation.Hesaid‘Theworld-widestandardsizeforsecuritycardsincreasedby5%duetoachangeinthecardreadertechnology,however,ournewsupplierprovidedmuchbetterqualityofplasticandthishelpedtocutdownonthewaste.’SNoperatesajustintime(JIT)systemandhencecarriesverylittleinventory.Required: