Analyze Breakeven Point - Variance Analysis - Accounting Assignment Help

Assignment Task :

Question 1

a) "Accounting is the systematic and comprehensive recording of financial transactions pertaining to a business, and it also refers to the process of summarizing, analyzing and reporting these transactions to oversight agencies and tax collection entities".

Discuss the Significance of Accounting and also explain the Scope of Accounting. 

b) From the following financial information of XYZ Ltd, for the year ended December 31, 2017. Prepare Income statement and Balance sheet. 

Question 2

a) "Calculating the breakeven point is a key financial analysis tool used by business owners"

1. Explicit the importance of breakeven analysis which is a critical step

2. Advantages and limitations of breakeven analysis

b) Robust Industries produces only one Product. The following revenues and cost have been estimated for the forthcoming month: 

Selling price, $ 250 per unit (SP) 

Variable cost, $ 100 per unit (VC) 

Fixed Cost, $ 56,000 

The Manager of the firm wishes to Know the following:

1. Calculate contribution margin per unit 

2. Calculate the contribution margin ratio. 

3. Calculate BEP in units 

4. Calculate BEP in sales. 

5. Calculate sales value in $ to earn a profit of $50,000

Question 3

a) Choose an Organization of your choice and underline the components which are considered while preparing a budget in that company; What are the major considerations business owners should make as they budget and forecast?

b) QPR industries are in the Business of manufacturing agro equipment. Prepare the Cash Budget for the Quarter April to June, based upon the following data and additional information.  

Question 4 

a) The Alpine Group, Inc. provides the following data for the June 2018, when 15,000 units are manufactured:

Standard Material Cost (Per Unit)             8.50 Kg @ $7.50 / Kg

Actual Material Cost (Per Unit)                6.75 Kg @ $13.5 / Kg

Standard Labour Cost (Per Unit)              5.5 hrs @ $15 / Hr

Actual Labour Cost (Per Unit)                 6.5 hrs @ $12.2 / Hr

a. Calculate:

Direct Material Price Variance

Direct Material Quantity/Usage Variance

Total Material Cost Variance

Direct Labour Rate Variance

Direct labor efficiency variance

Total Labour Cost Variance

b. Calculate variable overhead spending variance if actual labor hours used are 260, the standard variable overhead rate is $10.40 per direct labor hour and the actual variable overhead rate is $9.30 per direct labor hour. Also, specify whether the variance is favorable or unfavorable

c. Calculate the variable overhead efficiency variance using the following figures:

d) Variance analysis is especially effective when you review the amount of variance on a so that sudden changes in the variance level from month to month are more readily apparent. Variance analysis also involves the investigation of these differences, so that the outcome is a statement of the difference from expectations, and an interpretation of why the variance occurred.

Define the term "Variances Analysis" and also highlight the Advantages and Disadvantages of Variances.

Question 5

Define the term Cost. The classification depends on the nature of the organization concerned. Discuss cost classification based on variability and controllability, highlight examples for each.

Question 6

i. "Too much inventory is expensive and wasteful. Not enough inventories can result in lost sales"- Elucidate.

ii. Inventory can be anything from boxes of ice cream cones in the storeroom at a sweet shop to a million-square-foot warehouse full of goods for a big box chain. But in either case, accurate inventory management is a key to that company's success.

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