ACCT2002 - Cost Analysis for Decision Making - Accounting and Finance Assignment Help

Assignment Task

QUESTION ONE

BlueScope Steel Limited, an Australian flat product steel producer, closes its books and prepares financial statements at the end of each month. The statement of cost of goods sold for September follows:

Additional Information:

Of the utilities, 80 percent relates to manufacturing the steel; the remaining 20 percent relates to the sales and administrative function.

All rent is for the office building. ? Property taxes are assessed on the manufacturing plant.

Of the insurance, 60 percent is related to manufacturing the steel, the remaining 40 percent is related to the sales and administrative functions.

The company manufactured 7,825 tons of steel during September.

QUESTION ONE (continued)
BlueScope is subject to 30% company tax.

REQUIRED:
A. Prepare a Schedule of Cost of Goods Manufactured for October.
B. Prepare a Schedule of Cost of Goods Sold for October.
C. Prepare an Income Statement for the month of October.

QUESTION TWO

Avant Equipment Australia is a family business manufacturing replacement rotary sweeper brooms for the large sweeper trucks that clear leaves and rubbish from the city streets. The business is, to some degree, seasonal, with the largest demand during and just preceding the autumn and winter months. Since there are so many different kinds of sweeper brooms used by its customers, Avant Equipment makes all of its brooms to order.

The company has been analyszing its overhead accounts to determine fixed and variable components for planning purposes. Below are data for the company's janitorial costs over the last two years.

QUESTION TWO (continued)

The number of janitorial work days varies from month to month due to the number of weekdays, holidays, days of vacation and sick leave taken in the month. The number of units produced in a month varies depending on demand and the number of workdays in a month.

Avant Equipment is in the process of budgeting monthly janitorial costs for 2020. The assumption is that in some way janitorial costs is related to either janitorial work days or number of units produced.

REQUIRED:

A. Develop a regression that Avant Equipment should use (ie y = a + bx) and explain why it is the appropriate regression to use, using the appropriate statistical tools. B. Using the regression you developed in (A), predict the janitorial cost for the 6 months of 2020 (round your answer to whole numbers).

QUESTION THREE

Medina Corp produces bicycle helmets. Each helmet is sold for $100. Planned and actual production was the same for May and June. The cost of the beginning inventory in May is the same as the cost of helmets in May. Data for the helmets for May and June follows:

REQUIRED:

A. Prepare income statements for May and June under

(i) variable costing; and,

(ii) absorption costing.

B. Prepare a numerical reconciliation and explanation of the difference between operating income for each month under absorption costing and variable costing.

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