Standard cost Variance Analysis - Klingon Ltd. - Management Accounting

Internal code: MAS5076

Klingon Ltd. - Management Accounting Assignment:

Questions:   Job costing (20 marks) Management accounting and history. Taking the Great Pyramid of Giza as an example, describe how modern cost management accounting could be applied to a current attempt to recreate this structure. 2.  Process Costing 3. Joint costing - decision making: Joint cost allocation: additional processing beyond split-off point In a certain production process 100 000 kg of a single raw material were processed at a cost of $250 000. At split-off two intermediate products, A and B emerged, weighed as 60 000 kg of A and 40 000 kg of B. A was processed further at a cost of $45 000 to produce C, and B was processed further at a cost of $25 000 to produce D. C sold for $4.50 per kg. Questions on joint Costing:  (a) If A was allocated $187 500 of the joint production costs under the net realisable value method, what was the selling price of D? (b) Suppose the firm receives an offer to buy all of product A for $2 per kg at the split-off point. Would the firm be better off selling A or processing further to produce C? By how much? 4 .Variance analysis 5 .Budgeting part 1.:  A. Financial model to forecast Income Statements for 5 years (see your text page 267) From the following information prepare a financial model that would produce budgeted income statements and statements of retained earnings for the 5 years 20X2 to 20X6 for Unique Traders Ltd. All necessary calculations should be performed by the computer. Unique trades in one product only. In 20X1 sales were 30 000 units and volume is expected to increase by 8% each year (compound) to a maximum of 40 000 units per year. Unit selling price in the years 20X2, 20X3, 20X4 is expected to equal the unit cost of purchases made in the year, marked up by 30% whilst in 20X5 and 20X6 the mark-up is expected to be 35% on purchase cost. Unit purchase costs for the 5 years are estimated at 20X2 $5.10, 20X3 $5.36, 20X4 $5.68, 20X5 $6.02, 20X6 $6.50. Closing inventory is to be 15% of estimated sales units for the following year. Closing inventory for 20X1, however, was only 3600 units valued at $17 640. Assume a FIFO cost flow. General and administrative expenses are expected to equal 14% of sales revenue in each year. The tax rate is expected to be 40%. Provide for dividends equal to 65% of after tax profit. Retained earnings at the end of 20X1 amounted to $3500. Part 2. : How can budgeting be viewed as a political process?  Find a cartoon/comic strip image on the Internet to illustrate your discussion. Explain the relevance of this image to your answer.