Price $9
Accounting 4 Pages

Review Various Study Chapters Of ’cost Accounting’

Question

About TMA:

The TMA covers the cost accounting concepts and practices in the businesses. It is marked out of 100 and is worth 20% of the overall assessment component. It is intended to assess students’ understanding of some of the learning points within chapters 1 to 5. This TMA requires you to apply the course concepts. The TMA is intended to:

     
  • Assess students’ understanding of key learning points within chapters 1 to 5.   
  • Increase the students’ knowledge about the reality of the cost and management accounting as a profession. 
  • Develop students’ communication skills, such as essay writing, analysis and presentation of material.
  • Develop the ability to understand and interact with the nature of the managerial accounting tools in reality.   
  •  

The TMA:

The TMA requires you to:

     
  1. Review various study chapters of ’Cost Accounting’ Book and apply some of the concepts within it.
  2. Conduct a simple information search using the internet.
  3. Present your findings in not more than 1,200 words (900 words for Part A and 300 words for Part B). The word count excludes headings, references, title page, and diagrams. 
  4. You should use a Microsoft Office Word and Times New Roman Font of 12 points.
  5. You should read and follow the instructions below carefully. Each part of the process will carry marks for the assignment.
  6.  


Criteria for Grade Distribution:

 Criteria
 
 Content
 
 Referencing
 
 Structure and Presentation of ideas
 
 Total marks
 
 Part A
 
 Part B
 
 Cost Accounting at Granite Enterprises 
 
 Job Costing for Axe Ltd. 
 
 Marks
 
 50
 
 50
 
 (5)
 
 (5)
 
 100
 


The TMA Questions


Part A

Cost Accounting at Granite Enterprises

Granite Enterprises has just begun manufacturing and distributing goods across GCC countries. The company has been struggling to find the cost of goods manufactured.  The company is manufacturing different stationery items using different materials.   

Product A & B of Granite Enterprises

Following are some of the details about material, labour and manufacturing costs of making per unit of Product A  & B 


(a) Cost details


 Information
 
 Product A
 
 Product B
 
 Materials
 
 Units
 
 Cost per unit of materials
 
 Units
 
 Cost per unit of materials
 
 Material X
 
 2 pounds
 
 $ 3 per pound
 
 3 pounds
 
 $ 1.75 per pound
 
 Material Y
 
 4 pounds
 
 $ 2 per pound
 
 6 pounds
 
 $ 3.50 per pound
 
 Labour
 
 

 
 

 
 

 
 

 
 Labour 
 
 3 hours
 
 $ 15 per hour
 
  5 hours
 
 $ 12 per hour
 
 Indirect Manufacturing Costs
 
 

 
 

 
 

 
 

 
 Indirect Materials
 
 

 
 $ 5 per unit of output
 (per unit of product A)
 
 

 
 $ 2 per unit of output 
(per unit of Product B)
 
 Indirect Labour
 
 1.5 hours
 
 $ 9
 
 1 hour
 
 $ 10
 
 Other overheads
 
 

 
 $ 1.8 per unit of output 
(per unit of product A)
 
 

 
 $ 3 per unit of output
(per unit of Product B)
 


The Company is also providing some cost and sales details about other three products R, S and T as below:


 

 
 R
 
 S
 
 T
 
 Total
 
 Sales
 
 10,000
 
 15,000
 
 20,000
 
 45,000
 
 Variable Cost 
 
 4,000
 
 9,000
 
 10,000
 
 23,000
 
 Fixed Costs (absorbed using a unit absorption rate)
 
 3,000
 
 3,000
 
 3,000
 
 9,000
 
 Profit
 
 3,000
 
 3,000
 
 7,000
 
 13,000
 


Cost reduction strategies

The company has been hardly working to reduce the costs spent on their products. For reducing costs, they want to change the way their operational activities being carried out.  The company is being advised by experts to apply value chain and supply chain concepts within their operational activities.   The company CEO is very much interested in using supply chain management strategies in order to cut its costs. At the same time, he also wants to know the non-value adding activities upon which so much money is being spent by the company.  The CEO feels that constructing a viable value chain for their operational activities would minimize the costs spent on non-value adding items.  


Required


(1). Granite Enterprises wants to implement supply chain management strategies and it wants to have a viable value chain for their business activities. . 


In this context, discuss value chain and supply chain concepts in detail highlighting how these strategies would help companies like Granite Enterprises in cutting costs.    (15 marks)   


 (2). Using the information given above for Product A & Product B, ascertain the total cost per unit.  Assume here the manufacturing overheads given above are allocated using some basis (note: no need to use traditional or ABC method for allocation here)      (15 marks)


 (3) Using sales and cost details given above for products R, S and T, 


(i) find contribution margin ratio (as a percentage)  (5 marks)


(ii) find the new contribution margin ratio (as a percentage) if the sales mix of                  products were to be changed to R – 20%, S – 50% and T - 30%.     (15 marks)


Part B

Job Costing at Axe Limited

Axe Ltd manufactures a single product A.   It has two cost centers namely molding department and painting department. 


 Information
 
 Molding Department
 
 Painting Department
 
 Total Manufacturing overheads
 
 $ 301,000


 
 $ 367,500
 
 Total Machine hours (estimated)
 
 35,000


 
 

 
 Total Direct Labour Cost
 
 

 
 $ 210,000


 



Axe Ltd executes a job no. 205.   The cost and output details of Job No.205 are given below:


 Information
 
 Molding Department
 
 Painting Department
 
 Direct Materials
 
 $ 235
 
 $ 166
 
 Direct Labour
 
 $ 145
 
 $ 340
 
 Number of machine hours used in  job no. 205 
 
 55 hours
 
 

 
 Output (units)
(expected to be received from Job No. 205)
 
 25 units
 


Overheads allocation to Job No. 205 will be as follows:


(a) Molding department overheads will be allocated based on machine hours


(b) Painting Department overheads will be allocated using direct labour costs (as a percentage).


Required


(1) Calculate overhead absorption rate for Molding Department and Painting Department based on allocation bases given above(10 marks)

(2) Calculate the overheads to be allocated (applied) for Job No. 205 based on overhead absorption rate calculated above in question no. 1(10 marks)


(3) Ascertain the total cost of Job No. 205 and the cost per unit(10 marks)


(4) If the overheads incurred on Molding department and Painting department are $ 285,000 and $ 375,000 respectively and the overheads are allocated based on pre-determined rates (as calculated in question 1) to products, assuming total the number of machine hours for Molding department is 32,500 hours and the direct labour cost for painting department will be $ 218,000, will there be any over –allocation of overheads or under-allocation of overheads? Show the calculations clearly here. (10 marks)


(5) Explain briefly why under or over absorption of overheads occur? (10 marks)


Solution

Title: Review Various Study Chapters Of ’cost Accounting’
Length: 4 pages (1100 Words)
Style: N/A

Preview

PART A:

SOLUTION: 1

In his book, hedefines  (Porter, 2008). On the other hand, the supply chain is the movement of a service or product to the end customer by a system of people, resources, organizations, people, activities and information.It is evident that activities in the supply chain range from sourcing of raw materials to delivery of a finished commodity to the ultimate user (Nagumey, 2006). In this case, Granite Enterprises is striving to organize its affairs in a way that will cut their costs. A plethora of scholars has argued about the importance of the supply chain management and come up witha new concept in the supply chain management. Kim & Mauborgne, (2005) argue that for firms to stand out from the rest, they need to come up with value innovation. According to their book, they propose that value innovation is achieved only when the whole system of the company’s utility, price, and cost structure activity iscorrectly aligned(Kim & Mauborgne, 2005). It emphasizes how supply chain management is necessary to Granite Enterprises as a firm at this critical time when the CEO is interested in supply management strategies to cut its costs.

$9.00

* Once your purchase is processed by paypal you will be redirected back to this page and you'll have the option to download the paper. We'll also send the paper to your paypal email address as proof of purchase.
Download Paper

Order a high quality custom written paper

With a team of proficient and enthusiastic writers, we are able to produce a compelling text on practically any topic.

Plagiarism Free

Excellent Quality

100% MONEYBACK