■IPLACEX

NATIONAL TECHNOLOGY

ACEX.CL
o National Iplacex
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NATIONAL TECHNOLOGY

GENERAL INSTRUCTIONS
Once the comprehensive reading of Units I and II of the study material has been
completed, it is essential to carry out this workshop, the objective of which is to measure
the correct internalization and application of the concepts addressed in the aforementioned
units:

• Apply the cost systems in practical exercises.

• Apply manufacturing cost control in practical exercises.
• To carry out production and sales budgets.

The development of this work is individual; workshop deliveries in pairs or

groups will not be allowed.

Specific Instructions:
Activity Nº1: You have the following information related to the costs incurred by a
company in its production process:

- direct materials 25.000

- indirect materials 5.000
- direct labor 30.000
- indirect labor 4.500
- other indirect manufacturing expenses. 15.000

Requested:

- Calculate prime costs, conversion costs and product costs.

Prime Costs = Direct Material + Direct Labor 25.000+30.000 55.000
Conversion Costs = Direct Labor + Manufacturing Expenses 30.000+ 24.500 54.500
Total Production Costs= Direct Material + Conversion Cost 25.000+54.500 79.500

MANUFACTURING EXPENSES
indirect materials 5.000
indirect labor 4.500
other manufacturing overheads 15.000
TOTAL 24.500
Activity Nº2: Classify the following items according to the corresponding cost elements
(Remember that product costs are only those costs that are generated in the production
department of the company).

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NATIONAL TECHNOLOGY
Direct No
Direct Indirect
Cost Items Raw production
Labor Manufacturin
Materials cost
g Costs
Automotive paint x

Office expenses for sales manager x

Factory electrical power x

Remuneration of factory operators x

Drinking water from the factory x
Factory lease expense x
Salary of the company's General
Manager x
Salary of the company's accountant x
Cleaning materials used in the
factory x
Factory Supervisor Salary x

Activity Nº3: Imagine that you work as an accountant in a company that presents the
following data for the preparation of the sales and production budget, and you are asked to
prepare these budgets.

The data are as follows: Projected sales of:

■IPLACEX 1
GENERAL INSTRUCTIONS 2
Requested: 2
Activity 4: Given the following information: 4
Calculation is requested: 4
Contribution Margin = Unit Sales Price - Variable Expenses 4
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VIPLACEX 7
8OC 7
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The following additional data should be considered when preparing the production budget:

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□ The ending
NATIONAL inventory of each month corresponds to 10% of the following month's
TECHNOLOGY

sales.
□ The ending inventory for the month of May corresponds to 500 units.
□ Prepare the sales budget in physical and monetary units.
□ Prepare the production budget in physical units.

In addition, see the following video, which presents an example of a Production Budget,
created and published by Mr. Ronald Guanuche: https://youtu.be/oXrn-VY7cdQ

Sales budget (units)

ITEMS June July August
Sales (Units) 1.000 1.200 800

Sales Budget (pesos)

ITEMS June July August
Sales ($) 350.000 420.000 280.000

Production Budget (units)

June July August Total
Sales budget (units) 1.000 1.200 800 3.000
+ Desired Ending Inventory (units) 120 80 90 90
Total requirements 1.120 1.280 890 3.090
- Beginning Inventory (units) 500 120 80 500
Production budget per unit 620 1.160 810 2.590

Activity 4: Given the following information:

Selling price per unit $ 10

Variable unit cost (production and administration) $ 6
Total fixed costs $ 50.000

Calculation is requested:

Contribution Margin = Unit Sales Price - Variable Expenses

Contribution Margin = 10 - 6

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IPLACE
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NATIONAL TECHNOLOGY Contribution Margin = 4

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- "IPLACEXNATIONAL TECHNOLOGY

□ Break-even sales in physical units

Contribution Margin = Unit Sales Price - Variable Expenses

Contribution Margin = 10 - 6

Contribution Margin = 4

Pe (Breakeven Point) = . Fixed Expenses + Desired Profit .

Desired contribution margin per unit

Pe (Breakeven Point) = . 50.000 + 0 .

4

Pe (Breakeven Point) = 12,500 units

□ Break-even sales in monetary units

Pe (Breakeven Point) = 12,500 * 10

Pe (Breakeven Point) = $ 125.000

□ Sales in physical units required to achieve a profit of $ 4,000

■IPLACEX...........................................................................................................................................1
GENERAL INSTRUCTIONS......................................................................................................2
Requested:.................................................................................................................................2
Activity 4: Given the following information:............................................................................4
Calculation is requested:...........................................................................................................4
Contribution Margin = Unit Sales Price - Variable Expenses...................................................4
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VIPLACEX.......................................................................................................................................7

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4
VIPLACEX NATIONAL TECHNOLOGY

Pe (Breakeven Point) = 13,500 units

Formulas to be used:

Pe (Breakeven Point) = Fixed Expenses + Desired Profit Desired Contribution Margin per
Unit

Contribution Margin = Unit Sales Price - Variable Expenses

8OC
This activity will be evaluated by the professor of the course, by
. It is suggested, for its realization, to consider the Criteria of
Evaluation detailed at the end of this document.

The total score for this workshop is 100 points, and the minimum passing score
is 60 points.

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NATIONAL TECHNOLOGY

Evaluation Criteria Score

Determine the prime cost (Exercise Nº1) 8
Determine the conversion cost (Exercise Nº1) 8
Determines the production cost (Exercise Nº1) 8
Identify Direct Raw Material items (Exercise Nº2) 4
Identifies Direct Labor items (Exercise Nº2) 4
Identify Indirect Manufacturing Cost items (Exercise Nº2)
10
Identify the items that are not part of the cost of production (Exercise
Nº2). 6

Determine unit sales in the sales budget (Exercise Nº3) 5

Determines sales in pesos in the sales budget (Exercise Nº3) 5

Determines the production budget (Exercise Nº3) 9
Determine the break-even point in units (Exercise Nº4)
9
Determine the break-even point in pesos (Exercise Nº4) 9
Determine the breakeven point in units with expected profit (Exercise
Nº4) 9
Presents order in the development of the required calculations. 3
Is punctual in the delivery of the workshop 3
Total Score 100

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