Selected data for Babar Ltd of past year of operations are presented below Product X Production [ in units ] Sales [ in units] Selling price DLHours 25000 18000 $4.00 800 Manufacturing cost Raw Materials [S] Salaries of direct labour[$] 17000 24000 8000 Actual machine hours worked Hourly rate for DLH Non manufacturing cost Variable selling Fixed selling cost $30.00 18000 15000 Estimated fixed cost $28000 Budgeted Machine hours 8400 Company uses absorption cost based on machine hours. For calculating product cost using variable costing, assume 40 % of the overhead applied to be variable overhead [VOH]and the rest to be fixed overhead [FOH] %3D REQUIRED

Selected data for Babar Ltd of past year of operations are presented below Product X Production [ in units ] Sales [ in units] Selling price DLHours 25000 18000 $4.00 800 Manufacturing cost Raw Materials [S] Salaries of direct labour[$] 17000 24000 8000 Actual machine hours worked Hourly rate for DLH Non manufacturing cost Variable selling Fixed selling cost $30.00 18000 15000 Estimated fixed cost $28000 Budgeted Machine hours 8400 Company uses absorption cost based on machine hours. For calculating product cost using variable costing, assume 40 % of the overhead applied to be variable overhead [VOH]and the rest to be fixed overhead [FOH] %3D REQUIRED

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following particulars are extracted from the records of a company. Particulars Product A Product B Sale price per unit OMR 100 OMR 240 Consumption of material 4 kg 6 kg Material cost OMR20 OMR 30 Direct labour cost 30 20 Direct expenses 10 12 Machine hours used 6 4 Fixed overheads per unit OMR 10 OMR 20 Variable overheads per unit 30 40 Direct labour per hour is OMR 10. Comment on the profitability of eachproduct [both use same raw material] when, I] total sales potential in unitsis limited II] total sales potential in value is limited III] raw material is in short supply IV} production capacity [in terms of machine hours] is limited.Assuming rawmaterial asthe key factor, availability of which is 20,000 kg andmaximumsales potential of each product being 7000 units, find out the product mix which will yield maximum profits.
The following particulars are extracted from the records of a company. Particulars Product A Product B Sale price per unit |Consumption of material Material cost OMR 100 OMR 240 4 kg 6 kg OMR20 OMR 30 Direct labour cost 30 20 Direct expenses 10 12 Machine hours used 6. 4 Fixed overheads per unit Variable overheads per unit OMR 10 OMR 20 30 40 Direct labour per hour is OMR 10. Comment on the profitability of each product [both use same raw material] when, I] total sales potential in units is limited II] total sales potential in value is limited II] raw material is in short supply IV} production capacity [in terms of machine hours] is limited. Assuming raw material as the key factor, availability of which is 20,000 kg and maximum sales potential of each product being 7000 units, find out the product mix which will yield maximum profits.
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The following particulars are extracted from the records of a company. Product A Product B Sales (per unit) RO. 100 RO. 120 Consumption of material Material cost 2 kg 3 kg RO. 10 RO. 15 Direct wages cost RO. 15 RO. 10 Direct expenses RO. 5 RO. 6 Machine hours used 3 Overhead expenses: Fixed 10 Variable 15 20 Direct wage per hour is RO.5. Comment on the profitability of each product (both use the same raw material) when: (i) Total sales potential in units is limited Production capacity (in terms of machine hours) is the limiting factor. Material is in short supply (ii) (iv) Sales potential in value is limited.
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2.1 Prepare the Income statement of Cambridge Manufacturers for the year ended 31 March 2021 using the absorption costing method. INFORMATION The following information was extracted from the accounting records of Cambridge Manufacturers for the year ended 31 March 2021: Inventory on 01 April 2020 1 000 units Production for the year 30 000 units Sales for the year (at R240 per unit) 25 000 units Costs: Direct materials cost per unit R60 Direct labour cost per unit R36 Variable manufacturing overheads cost per unit R24 Variable selling and administrative costs per unit sold R12 Fixed manufacturing overhead cost R696 000 Fixed selling and administrative cost R303 200 Additional information The total manufacturing costs per unit for the year ended 31 March 2020 amounted to R130, comprising R110 for variable manufacturing costs and R20 for fixed manufacturing costs. The total selling and administrative costs per unit for the same period amounted to R10. The first-in-first out method of…