- Budgetary control and standard costing have the common objective of cost control by establishing pre-determined targets. These two techniques are similar in certain respects but differ in respect of other points. -Require to:Compare and contrast budgetary control and standard costing.
- Unicorn Company manufactures a device that is used by internet users to boost Wi-Fi signals. The following data relates to the first month of operation:
- Beginning inventory: 0 units
- Units produced: 40,000 units
- Units sold: 35,000 units
- Selling price: OMR72 per unitMarketing and administrative expenses:
- Variable marketing and administrative expenses per unit: OMR2.4
- Fixed marketing and administrative expenses per month: OMR672,000Manufacturing costs:
- Direct materials cost per unit: OMR18
- Direct labour cost per unit: OMR8.4
- Variable manufacturing overhead cost per unit: OMR2.4
- Fixed manufacturing overhead cost per month: OMR768,000 Management is anxious to see the success as well as profitability of newly designed unique booster. Required to:
- Calculate unit product cost
- Prepare income statement under marginal costing system and absorption costing system.
- Prepare a schedule to reconcile the net operating income under variable and absorption costing system and state the reasons for difference in profit under these costing systems.
- Compare marginal costing system and absorption costing system. Also, analyse which method is better and why.
3. Break Even Analysis is a concept in Marginal Costing, which is a useful tool to study the relation between fixed costs and variable costs and revenue.
Required to:
-Explain the benefits and limitations of Break Even Analysis.
-Provide your own numerical data and show the calculations for Break Even point in units and in Omani Rials, explaining how Break Even Analysis helps in decision making.
-Construct a Break Even Chart showing all its components.
-Provide a conclusion
Check the file below for more instructions and requirement
0 comments