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Introduction to Management Accounting - Doc

   

Added on  2021-06-17

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Introduction to Management Accounting

ContentsSolution 1:.............................................................................................................................................3Solution 2:.............................................................................................................................................4Solution 3:.............................................................................................................................................6Solution 4:.............................................................................................................................................9Solution 5:...........................................................................................................................................11Bibliography........................................................................................................................................14

Solution 1:Statement of Cost- Traditional ApproachParticulars Basic Model Advance ModelUnits produced and sold 1,600 1,500Direct Material cost per unit 325 560Direct Labour cost per unit 150 260Total Material Cost 5,20,000 8,40,000Total Labour cost 2,40,000 3,90,000Total Allocated Overhead cost 1,43,750 1,06,250Other Operating Expenses for Advance model - Selling and Administration expenses - 1,40,600 - Interest Expense - 25,200 - Office Rent - 35,900Total Cost 9,03,750 15,37,950Cost Price Per unit 565 1,025Allocation of Overhead-Traditional approachParticulars Amount Inspection 20,000Assembly 90,000Production Scheduling 1,05,000Machine set-up 35,000Total Overhead to be allocated 2,50,000Total Machine Hours consumed 8,000Overhead per Machine Hour 31 - Overhead Allocated to Basic Model 1,43,750 - Overhead Allocated to Advance Model 1,06,250

Solution 2:Statement of Cost- ABC approachParticulars Basic Model Advance ModelUnits produced and sold 1,600 1,500Direct Material cost per unit 325 560Direct Labour cost per unit 150 260Total Material Cost 5,20,000 8,40,000Total Labour cost 2,40,000 3,90,000Total Allocated Overhead cost 75,506 1,74,494Other Operating Expenses for Advance model - Selling and Administration expenses - 1,40,600 - Interest Expense - 25,200 - Office Rent - 35,900Total Cost 8,35,506 16,06,194Cost Price Per unit 522 1,071Allocation of Overhead-ABC ApproachParticularsInspectionAssemblyProductionSchedulingMachine set-upTotal CostCost20,000 90,000 1,05,000 35,000 2,50,000 Units 950 8,000 550 350 Cost per unit 21 11 191 100 Units for Basic Model 200 4,600 50 100 Units for Advance Model 750 3,400 500 250 Total Overhead for Basic Model4,211 51,750 9,545 10,000 75,506 Total Overhead for Advance Model15,789 38,250 95,455 25,000 1,74,494

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