Measurement and Decision Making Assignment Solution - Finance Module

This document presents a comprehensive solution to a Measurement and Decision Making assignment, covering key concepts in finance and accounting. The solution addresses various questions related to job costing, predetermined overhead rates, indirect costs, and process costing, providing calculations and explanations for each. It also delves into controllable and uncontrollable costs, value chain components, management accounting principles, and product costing. The assignment explores topics such as under and over applied overhead, the flow of goods in manufacturing, and the application of overheads. In addition, it discusses the role of management accounting, variable costs, and the importance of cost information in decision-making. The document includes answers to multiple-choice questions and detailed explanations, offering a complete understanding of the subject matter.

Measurement and Decision Making
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Questions no. Answers
Q.1. In which of the following industries could
job costing be used?
B: Machine shop and speciality manufacturing
Q.2. Formula for predetermined overhead rate D: Budgeted manufacturing overhead / budgeted
amount of cost driver
Q.3. Indirect material, indirect labour and other
manufacturing costs are termed as:
C: Production cost
Q.4. Calculation of total cost for the professional
audit firm
C: $1890
Q.5. stating the industry which uses process
costing
B: All of the above
Q.6. Explanation not suitable for the statement
mentioned:
B: Direct costs were unexpectedly high
Q.7. Calculation of total cost for the work
performed by an engineer
C: $1125
Q.8. Direct material, direct labour and
manufacturing overhead comes under:
A: Product cost
Q.9. Cost that can be significantly influenced by
manager termed as:
B: Controllable cost
Q.10. Underestimation of manufacturibng
overhead and overestimation of activity base
termed as:
D: over-applied factory overhead
Q.11. Name of the industry uses process costing: C: i and iii (petroleum and sugar refining)
12. Describing the flow of goods through the
manufacturing cost in order to calculate COGS
One can determine the amount of cost of goods
sold by using the following formula:
COGS = Opening stock + purchase – closing
stock
Q.14 Process costing systems are suitable for
firm that produce
1. Homogeneous products
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Q.17 Bambie Ltd applies overheads based on
direct labor hours. The company has budgeted
50000 direct labor hours at cost of $10 per
hour, and manufacturing overhead of $750000 in
the assembly division for the year. The actual
labor hours used for the year turns out to be
47000 hours. What is that applied overhead for
the year.
c. 500000
Q.18 Process costing is normally used when c. Large number of nearly identical products are
manufactured
Q.19 Planning is a. Setting objectives and formulating plans for
future operations
Q.21 Which of following is not period cost? b. Administrative cost
Q.22 Matt Litkee is confused about under and
over applied manufacturing overhead. Define the
terms for Matt and indicate the balance in the
manufacturing overhead account applicable to
each term.
Under applied overhead cost refers to the
amount that is related to the actual overhead cost
which are not allocated among different unit of
production. Contrary to this, there is over
applied overhead refers to the excessive amount
that is applied on the produced units over actual
value of expenses. To balance F/W will be
mentioned in case of over applied overhead in
manufacturing overhead account. In opposite to
this, By balance C/D will be mentioned in case
of under applied overhead in manufacturing
overhead account.
Q.24 managers using costing data for making
decision will usually use the following data in
product cost information
d. Manufacturing, upstream and downstream
costs
Q.25 Product costs are a. Inventoriable costs
Q.26 The technical term for moving cost
between one departments and the next
d. Transferred costs
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departments in multi-department process
Q.27 which is in correct order of cost incurrence
in the value chain
c. R 7amp; D, product design, manufacturing ,
marketing, distribution, customer support
Q.28 Which statement is false a. All information derived is necessary despite
the cost
Q.29 Examples of controllable and
uncontrollable cost
As per the detailed study, controllable cost is
referred as fixed cost which can be changed over
the time period. For example, the Kevin can
focus on have changes in fixed cost like rent and
insurance which will allow to attain better
benefits. Another example, can be that the
current storage house rent is 2000 pound per
month so over the time period. Kewin can rent
out new storage house which have low cost and
high storage capacity. Office supplies is also
considered as controllable cost because Kewin
may contact to different supplier in order to
acquire same raw materials at low cost. Supply
of raw material can be vary in market so it is
considered as controllable cost.
On the other side, uncontrollable cost is
considered as expense that cannot be changed by
individual or department. For example,
employee rate can not be changed so it is
uncontrollable cost. In addition to this, the
current cost of engineer is 3000 pounds as per
market standards. It means Kewin also need to
hire engineer at cost of 3000 pounds as per
market standards. It can not be changed by any
individual unless engineer himself allow to work
at low cost. Another example can be that rent
demanded by land lord can not be changed
because it also relates with the belief of
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individual perception.
Q.30 What is value chain? Describe all its
components.
It is a set of activities that a firm operating in a
specific industry in order to deliver valuable
product on time.
In-bound logistics
Production process
Out-bound logistics
Marketing
Sales
Q.31 management accounting d. Provides information fort parties external to
the organization
Q.32 the role of management accounting c. Provide information to managers within the
organisation
Q.33 Which statement is false c. In job costing, the cost of each unit of a
particular job is found by dividing the total cost
by the number of units in the job.
Q.34 Variable cost a. Vary directly with changes in activity level
Which of the statement is correct in relation to
determining whether a cost is direct or indirect
b.
Which of the following statements regarding the
competence of an accountant is true
c.
Which of the following would not be likely as a
consistent focus for a firm following product
differentiation strategy
c.
If the work in process inventory has increased
during the period then which statements is
correct
b.
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INTRODUCTION
TASK 1
1.1
1.2
1.3
TASK 2
2.1
2.2
2.3
2.4
TASK 3
3.1
3.2
3.3
TASK 4
1.1
1.2
1.3
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REFERENCES
Books and Journals
Online
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