Management Accounting: Cost Allocation, Overhead Variance, Transfer Pricing

Management
accounting

Contents
MAIN BODY...................................................................................................................................1
QUESTION 1...............................................................................................................................1
QUESTION 2...............................................................................................................................2
QUESTION 2...............................................................................................................................4
QUESTION 4...............................................................................................................................4
QUESTION 5...............................................................................................................................5
QUESTION 6...............................................................................................................................6
Selling price of A after split cost: ...................................................................................................6
REFERENCES................................................................................................................................7

MAIN BODY
QUESTION 1
Answer 1
(a)
Variable Cost: HAC-LAC/HAUs-LAUSs
Variable cost 80
Fixed cost HAC-(Variable cost*HAUs)
FC 2000
Y=a+bx
a= fixed cost
b= variable cost per unit
x= Hours of Operation
Week Hours of
Operation
Equation Total cost Fixed cost Variable cost
1 55 Y=2000+(80*
55)
6400 2000 4400
2 60 Y=2000+(80*
60)
6800 2000 4800
3 64 Y=2000+(80*
64)
7120 2000 5120
4 70 Y=2000+(80*
70)
7600 2000 5600
5 45 Y=2000+(80*
45)
5600 2000 3600
6 40 Y=2000+(80* 5200 2000 3200