EF manufactures and sells three products, X, Y and Z. The following production overhead costs are budgeted for next year:
Required:
Calculate the total budgeted production overhead cost for each product using activity based budgeting.
8fb9be1c-b0d5-4acb-8cfb-f4b4426e641B. The primary objective of Company A is to maximise profit. It is now deciding on the optimum production mix for the next period and has one limited production resource.
The production mix decision should be based on:
A company's product has the following standard selling price, variable costs and contribution:
Budgeted sales and production was 20,000 units and actual was 19,500 units.
Due to a market downturn the production and sales budget should have been 10% lower.
What is the operational sales volume contribution variance?
The manager of a recently opened cafe is deciding how many sandwiches to make each day.
The sandwiches are made in the morning before the cafe opens.
If demand exceeds the number of sandwiches made in the morning no extra sandwiches can be made during the day. Any unsold sandwiches are thrown away at the end of each day.
Daily demand is uncertain but is predicted to be 10, 20, 30 or 40 sandwiches.
The following regret matrix has been prepared:
If the minimax regret criterion is used to make the decision, the manager will choose to make:
A company is forecasting its revenue for May and has established that sales will be either high, medium or low. The expected value of sales revenue for May has been calculated as $160,000. The following table includes data which relate to the potential sales in May.
Revenue Probability Expected Value
High $250,000 0.2 C
Medium A 0.5 D
Low $100,000 B $30,000
Place the figures given in to the spaces marked with the letters A, B, C and D, to complete the above table.
Information about a company's only two products is as follows:
The revenue from the products must be in the constant mix of 2U:3V. Budgeted monthly sales revenue is $110,000.
Fixed costs are $23,095 each month.
To the nearest $10, what is the budgeted monthly margin of safety in terms of sales revenue?
A time series (TS) is made up of two main components i.e. trend (T) and the seasonal variation (SV).
The equation that represents the seasonal variation under the additive model is:
Calculate the sensitivity of the investment decision to a change in the annual fixed costs.
By how much should the present value of the fixed cost increase, before this project is not viable?
A manager has not yet used all oh his budget. He is worried that his budget maybe reduced next year if he is not seen to have needed all the funds. He decides to spend the remaining £1,580 on another team building
exercise as well as a catered lunch for his department.
This example falls under which behavioural aspect of budgetary control?
A company develops computer software programs to meet each client's specific requirements. The management accountant is considering introducing a standard costing system.
Which THREE of the following are reasons that support the case for the company's introduction of a standard costing system?
