tion (1 aster hy Production unit per month 1000 2000 3000 4000 cost Per per Production cost pet month $ $ $ $ Factory Rent 5000 5000 5000 5000 Factory Supervision 3000 3000 4200 4200 Utilites Cost per unit (yensea) 2000 $2 4000 2. 60002800042 Consumable 3000 $3 600043 |= 900031200083 Power 2000 $2 © 3000g45 © 4000 $1.3. S000 #25 Repairs 1000 6 1500 $0.95 2000f0.67 2500§0.¢25 Required ro) Analyse the six cost elements above into the following Four categories: Variable Fixed Semi-variable Step-Fixed — ) Using the high-low method, analyse the semi-variable costs into variable and fixed components © Forecast the total manufacturing costs that would be incurred at an output of 2950 units.Q) (> Voriolble cost: _Uublities } consumable Fixeol cost: Factny rent Semi-vomohle, fower; Ropatys Shep-Fixed : Factiny Supenision Cy Ci_ Power @ Vamable Cost por Unit = _High lost - Low Cost High Unit - (ow Unit = _$5,000 - $2,000 4,000 units - 1,000 unity = _ $3,000 "3,000 omits = ¥1__ per unit @ Fixed Cort Per Periool = Total Cost Per Pem'ed - Variable Cost Por Rental = $5000 - Cgix 4085 units > = $ 1000 fer ferivo Cb) oi? Repairs | © \emoble Cost Per Unit = _ Hi = ign Unit — tow Unit = $2,500 - $1,000 4,000 units — 1,000 units 1,500 3,000 units - $0.50 per unit " Total Cost Per Penied - Voeviable (ost Rev utd $2,500 - ¢ $0.50% 4,000 units $2,So0 ~ $2,000 $500 Per Perio @® Fixed Cost Per Pen'od " "Cer_Fovecast total Manufacturing costs at output 29150 units $ Factory Rent 5,000 Factory Superw'si'on 3,000 ublites (2x 29 50units7 5,400 consumables 3x 2,950 units 8,850 Powers 6 Ix 2950units) +1,00° 3,950 Repairs 60-5 x 39POunits? +50 AS _. 28,675 working Factory Supenision 2 skep-fixed cor oO unit fo 2999 unit 2 $3,000 3000 units and aoove > $4,200 me orrale | (er_Cost Element Total Fixed (ost Per Period Total vorvable Cinder 3,000 units] Over > 3,000 units $ $ Fach, Peart 5070 SE) _ = Factory Supenision 3,000 4,100 - _ adlites eS 3 Py | Consumables | = - 3 Powers aos 1,000 [,000 1 se Repairs 500 soo | 0.5 _ Total 9, 500 10, 300 6S y= $4,500 + 465% 2q50unKs) | Under 3000 nity 9 y= $10,700 + Gos x 2,950units) | pvew 3,000 units) 2. Forecast Tole marufacherng, cost at omstput of 2,950 units: $9,500 + (6-5 x 27507 $28, 645YW Question (2) Representative manufacturing costs for a company, for four different levels of output in a period, are as follows: Production units 10,000 12,000 15,000 19,000 Costs per month: $ $ $ s Direct materials 18,400 $1-84 22,080.51-84 27,600 91-84 34,960 $1 $4 Direct labour 13,500 $135 16,200 $3 20,250 $35 25,650 #135 General services 3,500 4-35 3,900 40.225 4,500 F030 5,300 F0-744 Machine maintenance 5,660 40.5% 6,260 $0-52 7,160 $0-4% 8.36080 44 Building related costs 7,200 7,200 7,200 7,200 Depreciation 7,000 40.30 7,200 §0.60 7,500 $0.57 7.9005 0-42 ‘Management 3,000 3,000 3,400 3,400 Required @ Analyse the seven cost elements above into the following Four categories: Variable Fixed ‘Semi-variable Step-Fixed , (b) Using the high-low method, analyse the semi-variable cost intd variable and fixed components. (©) _ Forecast the total manufacturing costs that would be incurred at an output of 13,800 units. (2002 Series 2)CO) Variable cost: pirect materials, Direct labour’ Fixed cost: Building related costs : __Semi- yaniable cost: General services, Machine maintenance. 1 able | General Services + —_ __Nomiable cost per unit = High Cost - low Cost _ nigh unit — Low Umit = $5300 — $3,500 19, 000 units ~ 10,000 units ee F 1BOM Hip) )_ will qooounits t £0.20 per unit | | Fixed cost per pet pallu per period — Vomabld ost per period = $5,300 - 0.20 x _19,QU0 units) = § 5300 ~ $3,800 | _ _=. 81,500 per period fo Mochine maintenance a Variable cost per unit = $4,360 = _$ 5660 - 19, 000 units — 19,000 unity dp Gan Fixed cost per period $9,360 - ($0.30 x 19,000) _ . oe $8,360 = $5, OO = _ $2, 660. per periodl ee ee on 71 Depreciation Veeviable cost per uait = $3800 = $2,000 19,000 units = 10, Own = £00 9,000 units = $010 per unit Fixed cost_per period - $ ya00 — (¥0:10 x 14000) = $7,900 - $1,400 a FO —FSHee $6000 per period | fevecast tytal manufacturing casts at an output 13,300 units | Pmeduction— units- | __ Managemend — 13,800 ogi! sts per mi : 4 4+ 7 _pivect_madenals ($1.84%13800) 25,392 | Directs Iabour (41-35 * 13,800) 13,630. General Services Go. 20 x 13,80) + 500 4,260 Machine maintenance (0? x13,8%)+ 2660 _ 6,800 Building related costs 3,200 : deprenation Co.1 x 13,800) + Oe use 4380 3,0004 | Aviernactive racthod —_ in using Cost Equation od Cost Rincton, yea + be Cost Element [to's total fixed cost per pend | *b"> aoa vevidy / | Urdler_15,000 units] Over 16,000 units | COE perp Direct ede rials J 218... z foe | Feeley Rent 7 en bsq_ _| & Direct labo | = shazee 8A ee } N35 | General senices | 500 OO} Machine aiotnance | -2660 | 2.660 | 0.30 Building related coshs | 7,200 az fo Deprecicction ee Management | 3,00 3, HOO = Total 4a46e— [4B a abe 3.34 a+ eu — 20360 == OTHER G. cicued 13800). — a me oe:Cost Rhoviey orel Twllatior Exist Question (3) ‘ Company A, which makes single produc, has the following data for he past four operating periods. i 7 5 Period 6 Period7 _—Period 8 Perioas LZ Production and sales (units) 14,500 12,400 16,800 15,250 Total operating costs $196,350 $187,500 $241,500 $251,850 General price-teve index 110 125 138 146 Required (@) —_ Usethe high-low method to: @ — Analysethdtotal operating costintoa (ariable cost per unit and total fixed costs perperiodat the Period 6 general price-level index. (5S marks) (i Estimate the total operating costs expected in Period 10 if 18,120 units are produced and sold the general price-level index is 15: (3 marks) (2009 Series 3)2850p Unit Difference Cost Using High-low nethod « Vortable cost fer Unit = $24, 150 2,850 units = $8.68 per unit Total Oost Pex Period —Vowinb le cart few Revd $189,350 - ¢ $868 x 15,250 units) $ St, 380 per Period for Poviod FPnie:i!0 Total Fixed cost Per Pertod nn (2) GI) Total Opereting Cost fur Pewed 10 - 18,120 units & PriesiéS : Was ak bic | = $53,380 + CT $B-68 per unit x 18,20 unis > = $24,662 x ®%1o = $302, 478Question (4) Alpha Limited has the following data for the maintenance ofits plant forthe past four operating periods Period 3 Period4 —PeriodS Period 6 Plant operation (hours) 8,500 7,750 10,250 9,800 Total plant maintenance costs, $131,560 $127,050 $163,680 $160,440 Average price-level index us 121 132 140 Required (a) Usethehigh-low method to: @ analyse the total plant maintenance cost intd a (ariable cost per hour and total fixed costs per period)t the Period 3 average price-level index. (S marks) (@ estimate the total plant maintenance costs in Period 7, if the plant is operated for 19500 hours and the average price-level index is 148. (3 marks) (2012 series 2)Chats Unit | pened | tata Plant (mninterante Cost | Pemod 3-Prie:115| ¢ + 10,250 5 163, (80 [32> (163,680%"%j307| 142, 607 +750 4 123,050 = $142,600 - $84,585 = $53,015 per Unit dor Poviod 3 -Prite: 115 CapCit ) Total Plant K Maintenance Cost for Period F- 19500 hang & Prie: ye yr a + bx My $53,015 + ($8.24 per unit x 10,500 jours > $144,785 x 5 $ 1e6, 332 \Question (5) Bosingwa Limited manufactures a single product, and has prepared the following budget for the next periog Production and sales in units 9,450 Costs (Ss) Direct materials 37,800 Direct labour 28,350 33,075 28,965 Total costs 128,190 Cost per unit 13.56 ‘The following information should also be taken into account: (1) The above budget is based on a 90% utilisation of the maximum operating capacity (2) The direct costs are proportionally variable with activity (3) The production overhead is a semi variable cost. At the maximum capacity (10,500 units) the budgeted overhead would be $35,175 overhead would be $35,175 (4) The selling, distribution and administration costs are semi variable costs and include a fixed element of _ $7,230 Required (a) Prepare budgets (similar to the above) using the high low method if appropriate based on: () 80%utilisation of operating capacity — 8,400 units (8 marks) (i) 100% utilisation of operating capacity — 10,500 units (6 marks) (b) Total variable cost per unit 80%,90%,and 100% Capacity (2 marks) (©) Total cost per unit 80%,90%,and 100% Capacity (Total 20 marks) (2013 Series 2)Bo Uist tor). Utioti) g eee ace 2 Productions oll saleCia units) Olost __Drect Moterial Direct labour __ @ Preduction Overhead = _ Voriolole Cost Fixed Cost Selling Dishnbstion& Admin Cast Vorialle_ Cost fixed Cost Cex 2-37 $400 a e400 * $42. 3 3,600 8400» $3) |. 25,200 can $27| 16, B00 14,195 | 19,320 zeae Kigge-x $47 Kigso x $3. Kgs $2.) | 6,225: 21,000 14,1TS <10jSeox$ 237] 24,150. 230 140,055 Cl NG, 325 +8409] (B85 <140,05529994 13,34(Ca)_ Working Dax. pyitisation ok Morcnnune Capacity - 450 units $0). Utilisation of maximum Capacity) = given = " W $7,230 per period vorioble Gost Per Unit = $28,965 - $4,2307 41 450 unity = _ $21, 735 = 2. 9450 unils 2:3 por dnt- @®. Cb) Total variable Cost per Unit Bi). Utbation| 07. Uilisabb] loo) Ublisedio. 7 3 st s¥ |_Direch Madenbl cost per Unit on 7 ~ | Direct Labour wst Per Unit 3 3. 3 Production Overhead por Gostspecuntb |, 2. | 2 2 Selling, Distributnen Adminishration Cost pout 2-3 2.3 ea Toto ue3 1.3 uU.3 1? Slee ce) Total Cost fer Unik cv +e> _ 87. Uist] 07. UFlisatio| too/- Utila | _ F x $ | Varialele Cost per Unit 3 -ia > 3 eixed Cost fer unit 2.55 22t 2.04 GUS + § 7,230 = $21, 4057 total Fixed €21,405= 340 <21,40529,49) <2,,405 19.505) etal 13.85 13.57 13.34 i: L ‘3