Cost and Cost Accounting Control

Cost and Cost Accounting Control

Table of Contents
Answer 1..........................................................................................................................................4
Revenue Budget...........................................................................................................................4
Number of staff required to cover classes...................................................................................4
Actions which can be taken in order to accommodate the growing student number..................5
Other budgets...............................................................................................................................5
Answer 2..........................................................................................................................................6
No. of standard clerical hours allowed........................................................................................6
Reason behind formation of Flexible based on number of clerical hours allowed.....................6
Flexible Overhead Budget...........................................................................................................6
Memorandum...............................................................................................................................7
Answer 3..........................................................................................................................................7
Part 1: Total Overhead Cost........................................................................................................7
Part 2: Overhead cost per box......................................................................................................8
Part 3: of overhead rate based on Machine Hours.......................................................................8
Part 4: Calculation of Overhead cost in total and per box of chemical as per requirement three8
Part 5: Reasons of the difference between two methods.............................................................8
Part 6: Calculation of unit cost of special order..........................................................................9
Answer 4..........................................................................................................................................9
Recommendation to management................................................................................................9
Letter to the management of Cool Pool Ltd..............................................................................10
Answer 5........................................................................................................................................11
Operating profit in both costing method....................................................................................12
Closing Inventory cost...............................................................................................................12
Recommendation to management of company..........................................................................12

References......................................................................................................................................13

Answer 1
Revenue Budget
Details and figures
Existing no. of students 15000
Forecasted growth % in no. of
students 5%
Increase in fees per subject 3500
Average student per class 80
No of semester 2
Subjects per semester 4
Staff Salary 120000
Statement presenting revenue budget for upcoming academic year for Resort Island
University
Particulars Amount
Number of Students 15000
Annual Growth 5%
Fee per subject 3500
Total Subject in two semester 8
Total Revenue 441000000
Less Reward (Scholarship) 4410000
Net Revenue 436590000
It has been provided that 150 students will be provided scholarship i.e. 1% of total available
students receiving reward.
Number of staff required to cover classes
Total no. of students = 15000
Number of students in average class = 80 per student
Average class = 15000/80
= 187.5 Class