Financial Performance
Shell B
Registered Posts: 95 Regular contributor ⭐
Hello
I am revising for the above and i am getting stuck with two things which i think maybe easy to sort out.
1) Standard cost cards, for the life on me i can never get my answers the same as the past papers.
2) Target costing
Can anyone help me please?????
Shell B
I am revising for the above and i am getting stuck with two things which i think maybe easy to sort out.
1) Standard cost cards, for the life on me i can never get my answers the same as the past papers.
2) Target costing
Can anyone help me please?????
Shell B
0
Comments
-
Shell
Are your answers right?
If so, the fact that you have different answer to the past paper is of no consequence.
Are you finding the standard cost of a unit of a product using 4 columns?- The inputs Materials, Labour, Overhead
- The amount of each input needed per unit of finished product
- The cost per kg/hr etc
- the cost per unit of out put with the total cost at the bottom of the column.
Are you finding target cost by selling price less required profit?
And then the individual cost elements, once you have the target cost?Sandy
sandy@sandyhood.com
www.sandyhood.com0 -
Thanks for answering your help is much appreciated.
for the cost card i have been doing the following, think its more or less how you have said.
QTY Cost per unit Total
Material
Labour
Overheads
total
for example if it says prepare a cost card for 10,000 bars of soap, am i doing cost for just 1 bar????? i think i am getting somthing really simple wrapped around my head i am looking at the june 2009 paper task 1.2
As for target costing i understand you have to take the target profit away from the selling price but i just dont understand the tables in the osbourne workbooks, not sure if you have one but in assessment 1 at the back there is a table which looks like this
Sales price per unit
Profit Margin
Total cost
Fixed cost per unit
Material cost per unit
Max labour cost per unit
Target labour time per unit (minutes)
is that enough info for you to help me or do you need some more????
Thanks for the help again0 -
Shell
The cost card would be for 10,000 bars of soap.
So Material (amount needed for 10,000 bars in kgs) cost per kg Cost
etc
Then add them up
The target cost question appears to be asking for the maximum time you could take making each unit
So:- Find the target total cost per unit
- take off the fixed cost per unit
- this leaves the total variable cost per unit
- take off the material cost per unit
- this gives you the max labour cost per unit
- Then divide the labour rate per hour by the max labour cost per unit
- That ought to give you the max labour time
See what you make of this:
Market price per unit: £25.00
Required profit margin: 20% of price
Fixed cost per unit (at forecast volume) £11.00
Material cost per unit £5.25
Labour rate per hour £15.00
How much time can be allocated to producing each unit?Sandy
sandy@sandyhood.com
www.sandyhood.com0 -
hello Sandy
this is what i got (sorry for late reply)
Sale Price £25.00
Profit Margin £5.00
Total cost - £20.00
Fixed cost - £11.00
Material - £5.25
Labour - £3.75
Time 4mins
I hope thats right0 -
£3.75 per unit = 0.25 hours per unit (which is where I would leave it) but if you insist on minutes then x 60 = 15 mins
£15.00 per hrSandy
sandy@sandyhood.com
www.sandyhood.com0
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