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Revision Cost Accounting copy
Account (AA101)
Kolej Poly-Tech MARA BANGI
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Revision Cost Accounting
Question 1
a. limiting factor refers to the factor that limits the production or sale of a product or service due to a limited availability of resources or materials. For example, labour, materials and manufacturing capacity.
b. Increase the capacity of the limiting factor that involve investing in new equipment or machinery to produce more goods or services and potentially increase profits.
c. Limiting Factor
Verify limiting factor
Fountain F1 Pool F2 Total Direct material G per unit 1 kg 1 kg Sales demand (unit) 10,000 8, Direct material G needed 10,000 kg 10,400 kg 20,400 kg Direct material G available (20,000 kg) Shortage 400 kg
The contribution earned by each product per unit of limiting resources Fountain F1 Pool F Sales Price 60 70 (-) Variable Costs Direct material G 3 6 Direct material H 5 6. Direct labour cost 8 5 Variable production overhead 5 (21) 4 (21. Contribution per unit 38 48. Direct material G per unit 1 kg 1 kg Contribution per material (per unit of limiting factor)
38 37.
Ranking 1 2
Budgeted production and sales
Products Units Material G needed Contribution Total Fountain F1 10,000 10,000 kg 38 385, Pool F2 7,692 10,000 kg 48 373, PROFIT 758,
Working:
Unit pool F
= 10,000 kg / 10,400 kg x 8,
= 7,
Question 4
a) Traditional absorption costing
Total Overheads:
26,550 + 66,400 + 48,000 + 54,320 = 195,
Total Labour Hours:
Units Hours Total P 15,000 0 1, Q 12,000 0 1, R 18,000 0 3, Total Labour Hours 6,
Overhead Charge Per Labour Hour:
Total Overhead = 195,
Total Labour Hours = 6,
Overhead per labour hours = 195,270 / 6,900 = 28.
Overhead for 1 unit of each product:
P 0 0 x 28 2. Q 0 0 x 28 4. R 0 0 x 28 5.
Direct Labour Cost
P 0 0 x 14 1. Q 0 0 x 14 2. R 0 0 x 14 2.
Cost per unit
P Q R Materials 1 x 2 2.
1 x 3 3.
1 x 4 4. Direct Labour 1 2 2. Overhead 2 4 5. Cost per unit 6 10 13.
Revision Cost Accounting copy
Course: Account (AA101)
University: Kolej Poly-Tech MARA BANGI
