CHINHOYI UNIVERSITY OF TECHNOLOGY

SCHOOL OF ENTERPRENEURSHIP AND BUSINESS SCIENCES

DEPARTMENT OF ACCOUNTING & FINANCE

BACHELOR OF SCIENCE HONORS DEGREE IN ACCOUNTANCY-

BLOCK RELEASE .GROUP 4 QUESTION 10
 GROUP MEMBERS

1. SHARON C HWANDE C20142780K

2. PETER MAPEPA C20141674D
 PART A

Direct materials(10 units*$30) $300

Direct labour plus variable (100hrs *$3) $300

Set up costs $1000

TOTAL $1600

Minimum price per machine $160

($1600/10units)
 PART B

Total output Cumulative time Total hours Average hours

1 100 100 100

2 (100 hrs *80%)80 (80 hrs *2 units) (160hrs 100hrs)

160 60
 PART B

Direct Materials (10 units *$30) $300

Direct Labour (60 hours *$3) $180

TOTAL $480

Minimum price per $48

machine($480/10units)
PART C

Direct Materials (20 units*$30) $600

Direct Labour (160hrs *$3) $480

Set up costs $1000

TOTAL $2080

Minimum price per machine ($2080/20units) $104

PART D

 Total revenue =unit selling price *number of machinest

=$45*20
=$900
 Total cost for combined order of 20 machines =$2080 (as
calculated in b)
 Therefore Profit /loss=Total revenue –total cost
=$900-$2080
=-$1180
PART E

Units produced Total output Cumulative Total hours Average hours

time
1 1 100 100 100

1 2 (100*80%)=80 (80*2)=160 (160-100)=60

2 4 (80*80%)=64 (64*4)=256 (256-160)=96

4 8 (64*80%)=51.2 (51.2*8)=409.6 (409.6-

256)=153.6
8 16 (51.2*80%)=40. (40.96*16)=655. (655.36-
96 36 409.6)=245.76
PART E

Total time for 160 mass production=655.36 hours

Total time for 140 mass production =(655.36-160)

=495.36 hrs.
PART E

Direct materials (140units *$30) $4200

Direct labour plus variables(495.36 hours $1486.08

*$3)
Marketing $250

TOTAL COST $5936.08

Revenue (140 *$45) $6300

Profit ($6300-$5936.08) $3643.92