Accounts Assignment 2

Topics: Variable cost, Fixed cost, Direct material price variance Pages: 12 (2545 words) Published: April 13, 2015

Assignment Cover Sheet

Student Name:
Student Number:

School of Law and Business
Charles Darwin University
Casuarina NT 0909

Phone:(08) 8946 6830
KUSH.
272261

Unit Name:
Unit Code:

ACCOUNTING FOR MANAGERS
PRBA007

Lecturers Name:

ANNA COOSHNA

Assessment Title ASSIGNMENT 2
Semester:
Year:
Assignment 2
1
2014
Due Date:
Lodgment Date:
Applied for Extension
02/11/2014
02/11/2014
NO
Lodgment Locations: (refer to specific lodgment requirements as set out by the lecturer) DO NOT LODGE BY FAX nor EMAIL nor at LECTURER’S OFFICE
The assignment must be lodged online via the Learn line Assignment Lodgement link on the Learn line site for this unit. Failure to use an acceptable file naming convention may result in your assignment lodgement being rejected. Refer to the endnotes of the assignment details for lodgement options if the Learn line Assignment Lodgement link for this unit is unavailable. DECLARATION BY STUDENT

I certify that this assignment is my own work, based on my own personal study and research, and that I have acknowledged all material and sources in the preparation of this assignment, whether they be books, articles reports, lecture notes, any other kind of document or personal communication. I also certify that this assignment has not previously been submitted for assessment in any other course or at any other time in the same course. I have read the University’s Academic and Scientific Misconduct Policy and understand its implications. *

Student Signature:

Office use only
Assessor use only
Date Received:
Please place grade here

Date Sent to Lecturer:

Comments:

Table of Contents

1. Operation Budget
Sales Budget
Production Budget
Direct Materials Purchases Budget
Direct labour Budget
Manufacturing Overhead Budget
Ending Finished Goods Inventory Budget
Cost Of Goods Sold Budget
Budgeted Income Statement
Cash Budget
2. Report on the impact of Cost Structures
3. Report on Budget versus Actual Outcomes
4. Discussion on Participative Budgeting
A Participative Budgetary Approach
An Imposed Budgetary Approach

PART A

ANSWER A

ANSWER B

ANSWER C

ANSWER D

ANSWER E

ANSWER F

ANSWER G

ANSWER H

ANSWER I

2. PART B

Rita’s concerns:

Her primary concern is that the current market for alternative power generation equipment is already volatile and subject to significant uncertainty:

a) BREAKEVEN POINT

ASSUMPTIONS/CALCULATION/EXPLAINATION
TOTAL FIXED COSTS
$ 371,150,571
From part H budgeted income statement
TOTAL CONTRIBUTION
$ 396,539,779
From part H budgeted income statement
TOTAL UNITS
$ 170,800
From part B Production Budget as sum of units of Jan,Feb and March UNIT CONTRIBUTION
$ 2,321
Total contribution divided by Total units
BEP (UNITS)
159,909
Total Fixed Costs divided by Unit contribution
BEP ($)
$ 927,472,200
BEP (Units) * $5800

To break even the company has to sell 126,901 units for the quarter.

Based on the data provided the budgeted sales for the quarter is 200,480 units ( 74250+59400+ 66830) and the actual sales for the quarter are 178,400.

Budgeted sales
200,480
Actual sales
178,400
BEP sales
159,909

b) Target Costing
As per the budgeted income statement the net profit for the first 3 months is as follows:

January
$ 91,638,004
February
$ - 37,254,258
March
$ - 28,994,538

Rita would be concerned that the net profit is declining and would wish that she understands the reason behind this.

The decline in the net profit could be attributed to two main reasons:

a) An increase in variable cost

January
$ 206,979,856
February
$ 272,177,027
March
$ 309,325,478

b) A decline in sales

January...
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