Looking for Plagiarism-Free Answers for Your US, UK, Singapore, New Zealand, and Ireland College/University Assignments?
Talk to an Expert| Category | Assignment | Subject | Accounting |
|---|---|---|---|
| University | Massey University | Module Title | 110703 MANAGEMENT ACCOUNTING AND DECISION MAKING |
1. Attempt all questions.
2. Show all your workings (calculations).
3. Write legibly and use a ballpoint-pen.
4. This paper has 10 pages.
The examination consists of 100 marks allocated as follows:
Question 1 Management and Management Accounting (9 marks)
Question 2 Costing Behaviour (21 marks)
Question 3 Costing System (30 marks)
Question 4 Short-Term Decision Making (8 marks)
Question 5 Budgeting, Standard Costing, Variances and Performance Management (32 marks)
Total: 100 Marks
Explain the concept of value chain and describe 4 ways in which value chain analysis can benefit organisations. You may use examples to illustrate your understanding.
(9 marks)
[TOTAL: 9 MARKS]
Part A - Cost Allocation
Goodson Company has two support departments: Human Resources and General Factory; and two producing departments: Grinding and Assembly. Budgeted data as shown below:
| Human Resources | General Factory | Grinding | Assembly | |
| Direct costs | $70,000 | $230,000 | $63,900 | $39,500 |
| Square feet | 4,000 | - | 2,000 | 6,000 |
| Direct labour | 600 | 11,000 | 20,000 | 80,000 |
| hours | - | - | - | - |
| Machine hours | - | 1,000 | 4,000 | 1,000 |
Human Resources is allocated on the basis of direct labour hours; General Factory is allocated on the basis of square feet.
Required
a) Allocate the costs of the support departments to producing departments using the step down method. Allocate General Factory costs first. Round your calculation to the nearest dollar.
(4 marks)
b) Calculate departmental overhead rates, using machine hours for Grinding and direct labour hours for Assembly. Round your answer to 2 decimal places.
(2 marks)
ii. Allocate the costs of the support departments to producing departments using the reciprocal method. (4 marks)
Question two continued
Part B - Cost Volume Profit Analysis
Nut Company produces a single product. It sold 25,000 units last year with the following results:
________________________________________________________________________
Sales $625,000
Variable costs (375,000)
Fixed costs (150,000)
Income before taxes 100,000
Income taxes (tax rate: 45%) (45,000)
After-tax profit $55,000
_______________________________________________________________________
In an attempt to improve its products, the company’s manager is suggesting the following changes:
Required:
Part A - Job Costing
High Desert Potteryworks makes a variety of pottery products that it sells to retailers such as Home Depot. The company uses a job-order costing system in which predetermined overhead rates are used to apply manufacturing overhead costs to jobs. The predetermined overhead
rate in the Molding Department is based on machine-hours, and the rate in the Painting Department is based on direct labour cost. At the beginning of the year, the company’s management made the following estimates:
Department
| Cost / Activity | Molding | Painting |
|---|---|---|
| Direct labour hours | 12,000 hrs | 60,000 hrs |
| Machine-hours | 70,000 hrs | 8,000 hrs |
| Direct materials cost | $510,000 | $650,000 |
| Direct labour cost | $130,000 | $420,000 |
| Manufacturing overhead cost | $602,000 | $735,000 |
Job 205 was started on April 1 and completed on April 10. The company’s cost records show the following information concerning the job:
Department
| Molding |
Painting |
|
|---|---|---|
| Direct labour-hours | 30 hrs | 85 hrs |
| Machine-hours | 110 hrs | 20 hrs |
| Materials cost placed into production | $470 | $332 |
| Direct labour costs | $290 | $680 |
Required
Question three continued
iv. At the end of the year, the records of High Desert Pottery works revealed the following actual cost and operating data for all jobs worked on during the year:
Department
| Molding |
Painting |
|
|---|---|---|
| Direct labour-hours | 10,000 hrs | 62,000 hrs |
| Machine-hours | 65,000 hrs | 9,000 hrs |
| Direct materials cost | $430,000 | $680,000 |
| Direct labour cost | $108,000 | $436,000 |
| Manufacturing overhead cost | $570,000 | $750,000 |
Calculate the amount of underapplied or overapplied overhead in each department at the end of the year. (3 marks)
Part B Process Costing
Red Dog manufactures toys for dogs and cats. The most popular toy is a small ball that dispenses tiny treats and is placed within a larger ball. To get the treats, dogs must roll the balls around until the treats fall out. These balls are mass produced from plastic. Direct materials are introduced at the beginning of the process, and conversion costs are incurred evenly throughout the manufacturing process. Once each unit is completed, it is transferred to finished goods. Data for the month of May are as follows:
| Particulars | Amount / Units |
|---|---|
| Beginning WIP (30% complete as to conversion) | |
| Direct material | $25,000 |
| Conversion costs | $3,000 |
| Total Beginning WIP | $28,000 |
| Units started during May | 80,000 units |
| Units completed and transferred out during May | 88,000 units |
| Ending WIP inventory (50% complete as to conversion) | 12,000 units |
| Direct material costs added during May | $220,000 |
| Conversion costs added during May | $74,000 |
Required:
i. Prepare a process cost report using the FIFO method. Structure your answer properly and show all calculations.
(8 marks)
ii. Describe 3 factors that might affect the cost accountant’s choice of process costing method.
(3 marks)
Need Help with 110703 Management Accounting and Decision Making Assignment? Get Expert Assignment Solutions Before Your Deadline
Get Assignment Help on WhatsAppStruggling with the 110703 Management Accounting and Decision Making Assignment? Get expert academic support to understand key topics such as value chain analysis, cost behaviour, cost allocation, cost-volume-profit analysis, job costing, process costing, short-term decision-making, budgeting, standard costing, variance analysis, and performance management. Whether you need help with complex calculations, overhead allocation, break-even analysis, predetermined overhead rates, or process costing questions, our expert writers can provide clear, well-structured, and 100% original solutions. With dedicated Cost Accounting Assignment Help and Accounting Assignment Help, you can receive tailored academic support for your 110703 Management Accounting and Decision Making Assignment and approach your assessment with greater confidence.
Get Your Free Academic Quote
No hidden fees · Instant response · 100% confidential
Let's Book Your Work with Our Expert and Get High-Quality Content
adsadsd
