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  • Selsonic Limited Question - CPULF

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    SELSONIC Limited have been asked to prepare a budget for three similar products which use the same type of material and labour. Total fixed overheads are estimated at PS60,000. Explain what is meant by the term'relevance' and how the management accountant applies the term to decision making situations.

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    SELSONIC Limited have been asked to prepare a budget for three similar products which use the same type of material and labour. Total fixed overheads are estimated at PS60,000. Explain what is meant by the term'relevance' and how the management accountant applies the term to decision making situations.

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    Download as DOC, PDF, TXT or read online from Scribd
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    28 views1 page

    Selsonic Limited Question - CPULF

    Uploaded by

    nitin77ssx9134
    SELSONIC Limited have been asked to prepare a budget for three similar products which use the same type of material and labour. Total fixed overheads are estimated at PS60,000. Explain what is meant by the term'relevance' and how the management accountant applies the term to decision making situations.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    SELSONIC LIMITED

    You have been asked to prepare a budget for Selsonic Limited for three similar products
    which use the same type of material and labour. The following details are available:

    Details per unit

    PRODUCT A PRODUCT B PRODUCT C


    £ £ £

    Sales price 100 150 200


    Direct material (£2 per lb) 10 66 45
    Direct wages 40 22 60
    Variable overheads 20 11 30

    Variable overhead are recovered at the rate of £2 per direct labour hour. Total fixed
    overheads are estimated at £60,000.

    You are required to:

    a) Calculate the priority ranking of the products:

    (i) when sales is limited by volume


    (ii) when sales is limited by sales value
    (iii) when the supply of labour(material) is limited

    b) Calculate the maximum profit and the sales in units when the raw material
    available is 30,000 lbs and the maximum sales potential for each product is A:
    800 units, B: 700 units & C: 900 units.

    c) Explain what is meant by the term ’relevance’ and how the management
    accountant applies it to decision making situations.

    /opt/scribd/conversion/tmp/scratch15568/42727505.doc

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