EXERCISE 1:

1 PRESENTATION OF THE OVERHEAD ABSORPTION BASE.

Total Mgt of Prove Supply W.S 1 Dist ADM

Elements Mat sales

99880 11100 6600 7400 43500 8780 12500

Mgt of 2400 1200 6000 1200 960 240
mat
(12000)
Prove 900 1800 3600 1800 450 450
sales
(9000)
Secondary 0 0 10400 53100 11780 13910 10690
total
Mr. 13000 1180 310 2000 2000
Cost rate 0.8 45 38 6.96 5.35

Let management of mat and prove sales be respectively.

X=11100 +0.1y =-----1

Y = 6600 to .2x =----2

X=11100+ 0.1(6600 + 2x)

x=11100+ 660 +0.02x

X-0.02x =11760

x=12000

Substituting x in 1

X = 11100 +0.1y

12000= 11100+0.1y

12000- 11100 =0,1y

900 =0,1y

y =9000
2.A) PRESENTATION OF PURCHASE COST

RM
Elements
Qty UP Amt.
Purge prize of RM 13000 3.0047 39062
Direct charges 13000 0.8 10400
Purchase costs 13000 3.8047 49462
2B) PRESENTATION OF THE EXIT CARD OF RM,

Elements Qty U.P Amt Elements QTY Up Amt

Initial 4000 3.5295 14118 consumption 14300 3.74 53482
stock
purchase 13000 3.847 49462 Small stock 2550 3.74 9537
s
Total 17000 3.74 63580 Different 150 3.74 561
stock stock
Total 17000 3.74 63580

2C) PRESENTATION OF COST OF PRODUCTION

Elements Product A Brushed product B

Qty U.P Amt Qty Up Amt
RM A consumed 11800 3.74 44132 2500 3.74 9350
direct labor 1180 30 35400 370 30 9300
indirect charges 1180 45 53100 3700 38 11780
initial product in progress 4248 2120
closing product in progress (10150) (1806)
Production Cost 11500 11.02 126730 1200 25.62 30744

EXIST CARD OF PRODUCTION OF A

Elements QTY Up Amts Elements Qty Up Amt

Initial finished 1500 10.847 16270 Sales of finished 10800 11 118800
pdt A pdt A
Production of 11500 11.02 126730 Final pdt A 2100 11 23100
finished pdt A
Difference 100 11 1100
Total stock 13000 11 143000 Total stock 13000 11 143000
 EXIST CARD OF PRODUCTION OF B

Elements QTY U.P Amts Elements Qty Up Amt

Initial finished 900 25.34 22806 Sales of 1600 25.50 40800
pdt B finished pdt B
Production of 1200 25.62 30744 Final stock 500 25.50 12750
finished pdt B
Total stock 2100 25.50 53550 Total stock 2100 25.50 53550
2d PRESENTATION OF THE COST PRICE OF PRODUCT (A) AND (B)

Elements Finished Product A Finished product B

Qty Up Amt Qty Up Amt

Production cost 10800 11 118800 1600 25.50 40800

of output sold

Indirect charges

Distribution 1512 6.96 10523.52 488 6.96 3396.48

Administration 1512 5.35 8089.2 488 5.35 2610.8

Cost price 10800 12.72 137412.72 10600 29.25 46807.28

2e PRESENTATION OF THE INDIVIDUAL AND GLOBAL RESULT OF PRODUCT (A) AND

Element Product A Product B Global result

Qty Up Amt Qty Up Amt

selling Price 10800 14 151200 1600 30.50 48800 200000

Cost price 10800 12.72 137376 1600 29.25 46800 184176

Result 10800 1.28 13800 1600 1.25 2000 15800

3 PRESENTATION OF THE FINANCIAL RESULTS

Elements Amount

Results 15800

Dep and provision (2040)

Incorporable differences (1661))

Incorporable charges (20)

Financial results 12079

4 THE RESULT ACCOUNT

Elements Calculation Amount

turnover 200000
Variable cost
Purchase cost 49462
Margin on variable cost 150538
Production cost 30744
Margin on production cost 119794
Cost price 46807.28
Result s 72986.72