Cost Analysis Homework - Financial Performance Review, 2018

This homework assignment analyzes various aspects of cost accounting and financial planning for a business. It begins with a monthly sales revenue statement, broken down by product (Bikini, Board short, Towel, Beach Bag) from January to December 2018. The assignment then presents a cash collection budget, detailing cash sales, collections from debtors, and total cash collections. Production budgets for Bikini, Board Short, Towel, and Beach Bag are provided, outlining opening inventory, sales, closing inventory, and total production units. Direct material and cash purchase budgets are calculated for each product, including direct material costs and payment schedules. Direct labor budgets, variable manufacturing overhead, and fixed manufacturing overhead are also presented. Furthermore, the assignment includes monthly operating cost budgets and closing inventory of finished goods for each product, offering a comprehensive overview of the company's financial performance and cost management strategies. The student has presented detailed calculations and budgets to demonstrate an understanding of cost accounting principles.

Running head: COST
Cost
Name of the Student:
Name of the University:
Authors Note:

1COST
Table of Contents
Answer to Question 1......................................................................................................................2
a........................................................................................................................................................2
b.......................................................................................................................................................3
C.......................................................................................................................................................4
d.......................................................................................................................................................7
e........................................................................................................................................................8
f........................................................................................................................................................9
g.....................................................................................................................................................10
h.....................................................................................................................................................10
i......................................................................................................................................................11
Answer to Question 2....................................................................................................................13
Introduction....................................................................................................................................13
Over view of the result..................................................................................................................13
Analysis of contribution................................................................................................................14
Cash Position of the company.......................................................................................................15
Analysis and Recommendation.....................................................................................................16
Conclusion.....................................................................................................................................17
Reference.......................................................................................................................................18

2COST
Answer to Question 1
a.
Statement Showing Monthly Sales Revenue
Months Bikini Board short Towel Beach Bag Total Sales
Jan-18 $150,000 $90,000 $18,000 $13,000 $271,000
Feb-18 $120,000 $82,500 $13,500 $11,700 $227,700
Mar-18 $130,000 $87,000 $11,700 $10,400 $239,100
Apr-18 $100,000 $75,000 $6,300 $7,800 $189,100
May-18 $40,000 $45,000 $3,600 $3,900 $92,500
Jun-18 $50,000 $52,500 $1,800 $2,600 $106,900
Jul-18 $40,000 $37,500 $1,800 $2,600 $81,900
Aug-18 $20,000 $30,000 $1,800 $2,600 $54,400
Sep-18 $130,000 $87,000 $11,700 $10,400 $239,100
Oct-18 $120,000 $82,500 $13,500 $11,700 $227,700
Nov-18 $120,000 $82,500 $13,500 $11,700 $227,700
Dec-18 $150,000 $90,000 $18,000 $13,000 $271,000
Statement showing cash collection budget
Month
s
Cash
Sales
Cash collection from debtors
Total cash
collection
60% collected after 1
month
40% collected after 2
month
Jan-18 $54,200 $130,080 $123,650 $307,930
Feb-18 $45,540 $109,296 $86,720 $241,556
Mar-
18 $47,820 $114,768 $72,864 $235,452
Apr-
18 $37,820 $90,768 $76,512 $205,100
May-
18 $18,500 $44,400 $60,512 $123,412
Jun-18 $21,380 $51,312 $29,600 $102,292
Jul-18 $16,380 $39,312 $34,208 $89,900
Aug-
18 $10,880 $26,112 $26,208 $63,200
Sep-18 $47,820 $114,768 $17,408 $179,996
Oct-18 $45,540 $109,296 $76,512 $231,348
Nov-
18 $45,540 $109,296 $72,864 $227,700
Dec-18 $54,200 $130,080 $72,864 $257,144

3COST
b.
Statement showing Production budget for Bikini (units)
Months Opening (A) Sales (B) Closing (C ) Total Production (B+C-A)
Jan-18 750 1,500 600 1,570
Feb-18 600 1,200 650 1,250
Mar-18 650 1,300 500 1,150
Apr-18 500 1,000 200 700
May-18 200 400 250 450
Jun-18 250 500 200 450
Jul-18 200 400 100 300
Aug-18 100 200 650 750
Sep-18 650 1,300 600 1,250
Oct-18 600 1,200 600 1,200
Nov-18 600 1,200 750 1,350
Dec-18 750 1,500 800 1,550
Statement showing Production budget for Board Short (units)
Months Opening (A) Sales (B) Closing (C ) Total Production
Jan-18 600 1,200 550 1,150
Feb-18 550 1,100 580 1,130
Mar-18 580 1,160 500 1,080
Apr-18 500 1,000 300 800
May-18 300 600 350 650
Jun-18 350 700 250 600
Jul-18 250 500 200 450
Aug-18 200 400 580 780
Sep-18 580 1,160 550 1,130
Oct-18 550 1,100 550 1,100
Nov-18 550 1,100 600 1,150
Dec-18 600 1,200 700 1,300
Statement showing Production budget for Towel (units)
Years Opening (A) Sales (B) Closing (C ) Total Production
Jan-18 200 400 150 350
Feb-18 150 300 130 280
Mar-18 130 260 70 200

4COST
Apr-18 70 140 40 110
May-18 40 80 20 60
Jun-18 20 40 20 40
Jul-18 20 40 20 40
Aug-18 20 40 130 150
Sep-18 130 260 150 280
Oct-18 150 300 150 300
Nov-18 150 300 200 350
Dec-18 200 400 220 420
Statement showing Production budget for Beach Bag (units)
Years Opening (A) Sales (B) Closing (C ) Total Production
Jan-18 100 200 90 190
Feb-18 90 180 80 170
Mar-18 80 160 60 140
Apr-18 60 120 30 90
May-18 30 60 20 50
Jun-18 20 40 20 40
Jul-18 20 40 20 40
Aug-18 20 40 80 100
Sep-18 80 160 90 170
Oct-18 90 180 90 180
Nov-18 90 180 100 190
Dec-18 100 200 110 210
C.
Statement showing Direct Material and cash Purchase Budget
For Bikini
Month
s
Openi
ng
Productio
n
Closin
g
Total
Purchase
(units) Direct material
Accoun
ts Paid
in the
same
month
Accoun
ts Paid
in the
followin
g month
Jan-18 1178 1,570 938 1330 $ 42,892.50 $12,868 $43,875
Feb-18 938 1,250 863 1175 $ 37,893.75 $11,368 $30,025
Mar-
18 863 1,150 525 813 $ 26,203.13 $7,861 $26,526

5COST
Apr-18 525 700 338 513 $ 16,528.13 $4,958 $18,342
May-
18 338 450 338 450 $ 14,512.50 $4,354 $11,570
Jun-18 338 450 225 338 $ 10,884.38 $3,265 $10,159
Jul-18 225 300 563 638 $ 20,559.38 $6,168 $7,619
Aug-
18 563 750 938 1125 $ 36,281.25 $10,884 $14,392
Sep-18 938 1,250 900 1213 $ 39,103.13 $11,731 $25,397
Oct-18 900 1,200 1013 1313 $ 42,328.13 $12,698 $27,372
Nov-18 1013 1,350 1163 1500 $ 48,375.00 $14,513 $29,630
Dec-18 1163 1,550 1125 1513 $ 48,778.13 $14,633 $33,863
Statement showing Direct Material and cash Purchase Budget
For Broad short
Month
s
Openin
g
Productio
n
Closin
g
Total Purchase
(units)
Direct
material
Accoun
ts Paid
in the
same
month
Accoun
ts Paid
in the
followin
g
month
Jan-18 900 1,200 825 1125
$
36,281.25 $10,884 $33,535
Feb-
18 825 1,100 870 1145
$
36,926.25 $11,078 $25,397
Mar-
18 870 1,160 750 1040
$
33,540.00 $10,062 $25,848
Apr-
18 750 1,000 450 700
$
22,575.00 $6,773 $23,478
May-
18 450 600 525 675
$
21,768.75 $6,531 $15,803
Jun-
18 525 700 375 550
$
17,737.50 $5,321 $15,238
Jul-18 375 500 300 425
$
13,706.25 $4,112 $12,416
Aug-
18 300 400 870 970
$
31,282.50 $9,385 $9,594
Sep-18 870 1,160 825 1115
$
35,958.75 $10,788 $21,898
Oct-18 825 1,100 825 1100
$
35,475.00 $10,643 $25,171
Nov-
18 825 1,100 900 1175
$
37,893.75 $11,368 $24,833
Dec-
18 900 1,200 975 1275
$
41,118.75 $12,336 $26,526

6COST
Statement showing Direct Material and cash Purchase Budget
For Towel
Month
s
Openin
g
Productio
n
Closin
g
Total Purchase
(units)
Direct
material
Account
s Paid
in the
same
month
Accou
nts
Paid
in the
followi
ng
month
Jan-18 263 350 210 298
$
9,594.38 $2,878 $9,781
Feb-18 210 280 150 220
$
7,095.00 $2,129 $6,716
Mar-
18 150 200 83 133
$
4,273.13 $1,282 $4,967
Apr-
18 83 110 45 73
$
2,338.13 $701 $2,991
May-
18 45 60 30 45
$
1,451.25 $435 $1,637
Jun-18 30 40 30 40
$
1,290.00 $387 $1,016
Jul-18 30 40 113 123
$
3,950.63 $1,185 $903
Aug-
18 113 150 210 248
$
7,981.88 $2,395 $2,765
Sep-18 210 280 225 295
$
9,513.75 $2,854 $5,587
Oct-18 225 300 263 338
$
10,884.38 $3,265 $6,660
Nov-
18 263 350 315 403
$
12,980.63 $3,894 $7,619
Dec-18 315 420 315 420
$
13,545.00 $4,064 $9,086
Statement showing Direct Material and cash Purchase Budget
For Beach bag
Month
s
Openin
g
Productio
n
Closin
g
Total Purchase
(units)
Direct
material
Accoun
ts Paid
in the
same
month
Accoun
ts Paid
in the
followin
g
month

7COST
Jan-18 143 190 128 175
$
5,643.75 $1,693 $5,310
Feb-
18 128 170 105 148
$
4,756.88 $1,427 $3,951
Mar-
18 105 140 68 103
$
3,305.63 $992 $3,330
Apr-
18 68 90 38 60
$
1,935.00 $581 $2,314
May-
18 38 50 30 43
$
1,370.63 $411 $1,355
Jun-
18 30 40 30 40
$
1,290.00 $387 $959
Jul-18 30 40 75 85
$
2,741.25 $822 $903
Aug-
18 75 100 128 153
$
4,918.13 $1,475 $1,919
Sep-18 128 170 135 178
$
5,724.38 $1,717 $3,443
Oct-18 135 180 143 188
$
6,046.88 $1,814 $4,007
Nov-
18 143 190 158 205
$
6,611.25 $1,983 $4,233
Dec-
18 158 210 158 210
$
6,772.50 $2,032 $4,628
d.
Statement showing Direct Labor Budget
Mon
th
Bikini Board Short Towel Beach bag
Labor
Hour
labor
Amount
Labor
Hour
labor
Amount
Labor
Hour
labor
Amount
Labor
Hour
labor
Amount
Jan-
18 1570
$
43,960.00 863
$
24,150.00 140
$
3,920.00 114
$
3,192.00
Feb-
18 1250
$
35,000.00 848
$
23,730.00 112
$
3,136.00 102
$
2,856.00
Mar-
18 1150
$
32,200.00 810
$
22,680.00 80
$
2,240.00 84
$
2,352.00
Apr-
18 700
$
19,600.00 600
$
16,800.00 44
$
1,232.00 54
$
1,512.00
May
-18 450
$
12,600.00 488
$
13,650.00 24
$
672.00 30
$
840.00
Jun-
18 450
$
12,600.00 450
$
12,600.00 16
$
448.00 24
$
672.00
Jul- 300 $ 338 $ 16 $ 24 $

8COST
18 8,400.00 9,450.00 448.00 672.00
Aug-
18 750
$
21,000.00 585
$
16,380.00 60
$
1,680.00 60
$
1,680.00
Sep-
18 1250
$
35,000.00 848
$
23,730.00 112
$
3,136.00 102
$
2,856.00
Oct-
18 1200
$
33,600.00 825
$
23,100.00 120
$
3,360.00 108
$
3,024.00
Nov-
18 1350
$
37,800.00 863
$
24,150.00 140
$
3,920.00 114
$
3,192.00
Dec-
18 1550
$
43,400.00 975
$
27,300.00 168
$
4,704.00 126
$
3,528.00
e.
Statement showing Variable Manufacturing Overhead
M
on
ths
Bikini Board Short Towel Beach bag Total
Indire
ct
Materi
al
Indir
ect
Labo
r
Indire
ct
Materi
al
Indir
ect
Labo
r
Indire
ct
Materi
al
Indir
ect
Labo
r
Indire
ct
Materi
al
Indire
ct
Labor
Indire
ct
Materi
al
Indir
ect
Labo
r
Ja
n-
18
$
3,140.
00
$
1,570.
00
$
2,300.
00
$
1,150.
00
$
700.00
$
350.0
0
$
380.00
$
190.0
0
$
6,520.0
0
$
3,260.
00
Fe
b-
18
$
2,500.
00
$
1,250.
00
$
2,260.
00
$
1,130.
00
$
560.00
$
280.0
0
$
340.00
$
170.0
0
$
5,660.0
0
$
2,830.
00
M
ar-
18
$
2,300.
00
$
1,150.
00
$
2,160.
00
$
1,080.
00
$
400.00
$
200.0
0
$
280.00
$
140.0
0
$
5,140.0
0
$
2,570.
00
Ap
r-
18
$
1,400.
00
$
700.0
0
$
1,600.
00
$
800.0
0
$
220.00
$
110.0
0
$
180.00
$
90.00
$
3,400.0
0
$
1,700.
00
M
ay
-
18
$
900.00
$
450.0
0
$
1,300.
00
$
650.0
0
$
120.00
$
60.00
$
100.00
$
50.00
$
2,420.0
0
$
1,210.
00
Ju
n-
18
$
900.00
$
450.0
0
$
1,200.
00
$
600.0
0
$
80.00
$
40.00
$
80.00
$
40.00
$
2,260.0
0
$
1,130.
00
Ju
l-
18
$
600.00
$
300.0
0
$
900.00
$
450.0
0
$
80.00
$
40.00
$
80.00
$
40.00
$
1,660.0
0
$
830.0
0
Au
g-
18
$
1,500.
00
$
750.0
0
$
1,560.
00
$
780.0
0
$
300.00
$
150.0
0
$
200.00
$
100.0
0
$
3,560.0
0
$
1,780.
00

9COST
Se
p-
18
$
2,500.
00
$
1,250.
00
$
2,260.
00
$
1,130.
00
$
560.00
$
280.0
0
$
340.00
$
170.0
0
$
5,660.0
0
$
2,830.
00
Oc
t-
18
$
2,400.
00
$
1,200.
00
$
2,200.
00
$
1,100.
00
$
600.00
$
300.0
0
$
360.00
$
180.0
0
$
5,560.0
0
$
2,780.
00
No
v-
18
$
2,700.
00
$
1,350.
00
$
2,300.
00
$
1,150.
00
$
700.00
$
350.0
0
$
380.00
$
190.0
0
$
6,080.0
0
$
3,040.
00
De
c-
18
$
3,100.
00
$
1,550.
00
$
2,600.
00
$
1,300.
00
$
840.00
$
420.0
0
$
420.00
$
210.0
0
$
6,960.0
0
$
3,480.
00
To
tal
$
23,940
.00
$
11,97
0.00
$
22,640
.00
$
11,32
0.00
$
5,160.
00
$
2,580.
00
$
3,140.
00
$
1,570.
00
$
54,880.
00
$
27,44
0.00
Statement showing Fixed Manufacturing overhead
Particulars Total Bikini
Broad
short Towel
Beach
Bag
Utilities
$
6,600.00
$
2,879
$
2,723
$
621
$
378
Insurance
$
2,400.00
$
1,047
$
990
$
226
$
137
Supervisors salary
$
54,000.00
$
23,556
$
22,277
$
5,077
$
3,090
Rent
$
67,200.00
$
29,314
$
27,722
$
6,318
$
3,845
Repair and Maintenance
$
10,000.00
$
4,362
$
4,125
$
940
$
572
Depreciation
$
9,000.00
$
3,926
$
3,713
$
846
$
515
Total Fixed
Manufacturing Overhead
$
149,200.00
$
65,084.69
$
61,550.44
$
14,028.2
8
$
8,536.59

10COST
f.
Statement showing monthly operating cost budget
Months Utilities Insurance
Administrative
Wages
Office
Expenses Rent
Jan-18 $ 50.00 $ 500.00 $ 2,500.00 $ 1,500.00 $ 1,400.00
Feb-18 $ 50.00 $ 500.00 $ 2,500.00 $ 1,500.00 $ 1,400.00
Mar-18 $ 50.00 $ 500.00 $ 2,500.00 $ 1,500.00 $ 1,400.00
Apr-18 $ 50.00 $ 500.00 $ 2,500.00 $ 1,500.00 $ 1,400.00
May-18 $ 50.00 $ 500.00 $ 2,500.00 $ 1,500.00 $ 1,400.00
Jun-18 $ 50.00 $ 500.00 $ 2,500.00 $ 1,500.00 $ 1,400.00
Jul-18 $ 50.00 $ 500.00 $ 2,500.00 $ 1,500.00 $ 1,400.00
Aug-18 $ 50.00 $ 500.00 $ 2,500.00 $ 1,500.00 $ 1,400.00
Sep-18 $ 50.00 $ 500.00 $ 2,500.00 $ 1,500.00 $ 1,400.00
Oct-18 $ 50.00 $ 500.00 $ 2,500.00 $ 1,500.00 $ 1,400.00
Nov-18 $ 50.00 $ 500.00 $ 2,500.00 $ 1,500.00 $ 1,400.00
Dec-18 $ 50.00 $ 500.00 $ 2,500.00 $ 1,500.00 $ 1,400.00
Total Expenses $ 600.00 $ 6,000.00 $ 30,000.00 $ 18,000.00 $ 16,800.00
g.
Statement showing closing inventory of Finished goods
Months Bikini Board Short Towel Beach Bag Total
Jan-18 $ 60,000.00 $ 41,250.00 $ 6,750.00 $ 5,850.00 $ 113,850.00
Feb-18 $ 65,000.00 $ 43,500.00 $ 5,850.00 $ 5,200.00 $ 119,550.00
Mar-18 $ 50,000.00 $ 37,500.00 $ 3,150.00 $ 3,900.00 $ 94,550.00
Apr-18 $ 20,000.00 $ 22,500.00 $ 1,800.00 $ 1,950.00 $ 46,250.00
May-18 $ 25,000.00 $ 26,250.00 $ 900.00 $ 1,300.00 $ 53,450.00
Jun-18 $ 20,000.00 $ 18,750.00 $ 900.00 $ 1,300.00 $ 40,950.00
Jul-18 $ 10,000.00 $ 15,000.00 $ 900.00 $ 1,300.00 $ 27,200.00
Aug-18 $ 65,000.00 $ 43,500.00 $ 5,850.00 $ 5,200.00 $ 119,550.00
Sep-18 $ 60,000.00 $ 41,250.00 $ 6,750.00 $ 5,850.00 $ 113,850.00
Oct-18 $ 60,000.00 $ 41,250.00 $ 6,750.00 $ 5,850.00 $ 113,850.00
Nov-18 $ 75,000.00 $ 45,000.00 $ 9,000.00 $ 6,500.00 $ 135,500.00
Dec-18 $ 80,000.00 $ 52,500.00 $ 9,900.00 $ 7,150.00 $ 149,550.00

11COST
h.
Statement showing Cost of sales Budget
Particulars Bikini Board Short Towel
Beach
Bag Total
Direct Material $386,032.50 $387,710.00 $81,270.00
$41,605.0
0
$896,617.
50
Direct Labor $335,160.00 $237,720.00 $28,896.00
$26,376.0
0
$628,152.
00
Variable Manufacturing
Overhead
Indirect Material $23,940.00 $22,640.00 $5,160.00 $3,140.00
$54,880.0
0
Indirect Labor $11,970.00 $11,320.00 $2,580.00 $1,570.00
$27,440.0
0
Fixed Manufacturing
Overhead
Utilities $2,879.08 $2,722.74 $620.55 $377.62 $6,600.00
Insurance $1,046.94 $990.09 $225.66 $137.32 $2,400.00
Supervisors salary $23,556.12 $22,276.97 $5,077.26 $3,089.65
$54,000.0
0
Rent $29,314.29 $27,722.45 $6,318.37 $3,844.90
$67,200.0
0
Repair and Maintenance $4,362.24 $4,125.36 $940.23 $572.16
$10,000.0
0
Depreciation $3,926.02 $3,712.83 $846.21 $514.94 $9,000.00
Total manufacturing Cost $822,187.19 $720,940.44
$131,934.2
8
$81,227.5
9
$1,756,28
9.50
Opening Inventory of FG
$
75,000.00
$
45,000.00
$
9,000.00
$
6,500.00
$135,500.
00
Closing Inventory of FG
$
(80,000.00)
$
(52,500.00)
$
(9,900.00)
$
(7,150.00)
($149,550.
00)
Cost of Sales $817,187.19 $713,440.44
$131,034.2
8
$80,577.5
9
$1,742,23
9.50
i.
Statement showing budgeted Income Statement
Particulars Bikini
Board
Short Towel
Beach
Bag Total
Sales $1,170,000 $841,500 $115,200 $101,400 $2,228,100
Less:
Cost of sales
$817,187.1
9 $713,440.44 $131,034.28 $80,577.59
$1,742,239.5
0
Gross Profit
$352,812.8
1 $128,059.56
($15,834.28
) $20,822.41 $485,860.50