Management Accounting: Costing and Profit Analysis

MANAGEMENT ACCOUNTING
[Type the document subtitle]
Student Name
[Pick the date]

Part 1
Question 1.1
The requisite calculations for income statement are furnished below.
Net sales
Barbeque selling price = $2.00 per unit
Number of barbeque sold = 2,000
Balloon selling price =$1.00 per unit
Number of balloon sold =1,000
Thus,
Net sales ¿ ( 2000∗$ 2 )+ ( 1000∗$ 1 )=$ 5,000
Cost of goods sold
Barbeque cost = $0.2 per unit
Number of barbeque sold = 2,000
Balloon cost =$0.05 per unit
Number of balloon sold =1,000
Each partner will get an amount = $400
Number of partners (friends) =4
Thus,
Direct material cost ¿ ( 2000∗$ 0.2 ) + ( 1000∗$ 0.05 ) =$ 450
Further,
1

Direct labour cost ¿ 4∗$ 400=$ 1,600
The other expenses such as expense incurred in the production process will be paid by the
friends. The sum of expenses will be manufacturing overhead.
Leasing a BBQ = $200
Balloon pump = $50
Manufacturing overhead = $50 +$200 =$250
Selling and Administrative Expenses
There are two expenses related to the sales and administrative tasks that are highlighted below.
Leasing a gazebo = $50
Getting permit for setting up shop = $250
Income Statement
Part 2
Question 2.1
2