This afternoons costing exam

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    This afternoons costing exam

    Hi everyone<BR><BR>Well I've got home, and looked straight on the forum, and now I am feeling very depressed.<BR>My heart sank when I read about the wage journals, as I hadn't revised for this.<BR><BR>I battled on working out the forcast contribution per unit, and think I got a total different answer to everyone else. <BR>I did however rank Beta as no. 1 but my breakeven poing was something like 611 I think.<BR><BR>Totally botched this one up, so I guess I'll be resitting in June!!!!<BR><BR><BR>Arghhhhhhhhhhhhh.<BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    This afternoons costing exam

    I got 1000 for the breakeven, but changed my answer in the profit bit to alpha, gamma and beta.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    This afternoons costing exam

    I got exactly the same
  • System
    System Posts: 100,534 🤖 Admin 🤖
    This afternoons costing exam

    Hi I got the same as you
  • System
    System Posts: 100,534 🤖 Admin 🤖
    This afternoons costing exam

    On the last question I also said we should go ahead with the investment - is that wrong then?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    This afternoons costing exam

    Hi Kelly, <BR><BR>I got 1000 units for the break-even and Beta comes first, the Gamma and then Alpha. <BR><BR>Hope this helps. <BR><BR><BR>Bhav
  • System
    System Posts: 100,534 🤖 Admin 🤖
    This afternoons costing exam

    Hi Bennie <BR><BR>£3000 as a CR in the ledger code for â??Work - In - Progress) <BR>Employee NI and Employers NI â?? I added these together and put it in the ledger code for â??NI Payableâ?? as a DR. <BR>Net wages went is a DR in the ledger code for â??Net Wages Payable) <BR>And the other one, which I cannot remember what it was, went in the ledger code remaining as a DR also. <BR><BR>I did this on the basis that NI, tax and net wages are expenses WHICH MEANS DEBIT.<BR><BR>Anyone else thought this? <BR> <BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    This afternoons costing exam

    Hiya, <BR><BR>In regards to the paper we did for the ECR. I just wanted to see if you knew if any of my answers were correct. <BR><BR> <BR><BR>For the re-order level I put 75,000kgs. (I put this because normally you would do 'Maximum usuage x Maximum lead time' but it said that they keep a buffer of 25,000kgs. So that would mean that in any one given time there should be at least 50,000kgs in stock but then it take two weeks to order, so another 25,000kgs would be needed, thus the total being 75,000kgs. <BR> <BR><BR>For the labour question I put the: <BR> <BR><BR>£3000 as a CR in the ledger code for â??Work - In - Progress) <BR>Employee NI and Employers NI â?? I added these together and put it in the ledger code for â??NI Payableâ?? as a DR. <BR>Net wages went is a DR in the ledger code for â??Net Wages Payable) <BR>And the other one, which I cannot remember what it was, went in the ledger code remaining as a DR also. <BR> <BR><BR>For the break-even I got £52,000 / £52 contribution per unit for Beta = 1000 units <BR> <BR><BR>We should make more the Beta range and then the Gamma range and then the Alpha range. <BR> <BR><BR>We should not adopt the policy of making just Beta, as the company would need to make and sell 1000 units of the Beta range, but the demand is only 200 units. Also, the other reason was because it may upset your current clients and therefore they might decide to buy all three of the products elsewhere, thus resulting in a loss of business for China Ltd. <BR> <BR><BR>For the unit contribution it was £27 for Alpha, £52 for Beta and £43 for Gamma (I think). <BR> <BR><BR>For the question were it asked if budgeted activity increases then what happens to the cost of overheads charged to an individual product. I put that if activity goes up the cost of overheads charged to one single unit is going to be less than if the activity was less, since you are spreading the cost over more hours. <BR> <BR><BR>For the memo I put: <BR> <BR><BR>- Payback - is the amount of time it would take us to recover our initial cash cost of this investment. This is used to help us evaluate this project as it lets you know how quickly you will recover your initial investment. <BR><BR>- Internal rate of return â?? is the rate of return which the company would like on its investment. (We didnâ??t actually cover this is class). <BR><BR>- NPV is the net present value of money. It tells you the value of £x received in the future in todayâ??s value, i.e. how much £1 received in the future would be worth now. So, having a positive NPV means that you have cash surplus and that therefore you should go ahead with the project. This method deducts any costs that will be incurred against the initial cash flow, thus leaving the net present cash flow. <BR><BR>- I said that you should go ahead with the project as it has a relatively short payback period of 3 years, and that because it has a positive NPV, thus a cash surplus. <BR><BR> <BR><BR> <BR>Look forward to hearing from you. <BR> <BR><BR><BR>Bhavi<BR> <BR>

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