Document Related to Managerial Accounting

Added on - 21 Apr 2020

  • 6

    pages

  • 832

    words

  • 10

    views

  • 0

    downloads

Showing pages 1 to 3 of 6 pages
Running head: MANAGERIAL ACCOUNTINGManagerial accountingName of the studentName of the universityAuthor note
1MANAGERIAL ACCOUNTINGTable of Contentsa.Current system....................................................................................................................2b.Explanation for manufacturing overhead...........................................................................2c.Machine related cost...........................................................................................................2d.Usage of activity based costing data...................................................................................2e.Profitability of deluxe door.................................................................................................3f.Required considerations for sales mix strategy..................................................................4Reference....................................................................................................................................5
2MANAGERIAL ACCOUNTINGa.Current system1.Estimated manufacturing cost per unit for deluxe entry door is = ($ 180 + $ 80) = $260Estimated manufacturing cost per unit for standard entry door is = ($ 130 + $ 120) =$ 2502.Estimated profit per unit for deluxe entry door is ($ 650 - $ 260) = $ 390Estimated profit per unit for standard entry door is ($ 475 - $ 250) = $ 225b.Explanation for manufacturing overheadCurrently, the support manufacturing costs are allocated on the basis of direct labourlabours. As the deluxe doors manufactured by using the systems of new robotics, it seemsthat less amount of direct labour is required for manufacturing each unit of the deluxe entrydoor (Edmonds et al., 2016).c.Machine related costThe machine related costs are high probably due to the the results for purchasing newrobotics equipments for the purpose of deluxe products. Though the total machine hours foreach of the product is same, the each deluxe product uses (300,000 mh / 50,000 units) = 6machine hours. On the other hand, each standard products use (300,000 mh / 400,000 units) =0.75 machine hours. By analysing the machine hours for each unit instead of total machinehours, the explanation can be clearer (Marshall, 2016).d.Usage of activity based costing data1.Computation of cost driver rate
desklib-logo
You’re reading a preview
card-image

To View Complete Document

Become a Desklib Library Member.
Subscribe to our plans

Download This Document