Faculty of Higher Education

Assignment Cover Sheet

Unit Code H15017

Unit Name MANAGERIAL ACCOUNTING

Assignment Number TUTORIAL QUESTIONS 2

Due Date 26 -05-2020

Declaration
Complete this and attach as a front cover sheet to your Blackboard submission

We certify that:
1. This assignment is our own work. We have acknowledged and disclosed any
assistance received in its preparation and cited all sources from which data, ideas,
words (whether quoted directly or paraphrased) were taken.

2. This assignment was prepared specifically for this unit only.

3. The reference list is truthful and accurate and in Harvard referencing style .

Student name/s & ID LECTURER NO OF QUES SUBMITTED

1,2,3,4,5
 Table of Contents
Answer to Question 1 (Week 6).................................................................................................2

Part A.....................................................................................................................................2

Part B......................................................................................................................................2

Answer to QuestioN2 (Week 7).................................................................................................4

Part A.....................................................................................................................................4

Answer to Question3 (Week 8)..................................................................................................6

Part A.....................................................................................................................................6

Part B......................................................................................................................................7

Part C......................................................................................................................................7

Answer to Question 4 (Week 9).................................................................................................8

Part A.....................................................................................................................................8

Part B......................................................................................................................................9

Answer to Question 5 (Week 10).............................................................................................10

Part (A).................................................................................................................................11

Part B....................................................................................................................................12

Reference..................................................................................................................................13
ANS TO QUES 1
GIVEN
REVENUE BUDGET

CURRENT STUDENT ENROLLMENT 30000

ADD 1500
INCREASE IN STUDENT BODY
(30,000*5%)

LESS -2000
TUTION FEE SCHOLARSHIP

TUTION PAYING STUDENTS 313000

TOTAL STUDENT 31500

PART A

REVENUE BUDGET :
PARTICULARS CALCULATION AMOUNT

INCOME FROM 31500*3000 PER 756,000,000

STUDENTS SUBJECT *4
SUBJECTS*2SEMESTERS
 LES STAFF 12000*525 63,000,000
SALARY

LESS 200 STUDENTS *300 PER 4,800,000

SCHOLARSHIP SUBJECT * 2SEMESTERS

NET INCOME 688,200,000

PART B :
NO OF STAFF NEEDED TO COVER THE CLASSSES

NO OF CLASSES = TOTAL NUMBER OF STUDENTS / NO OF STUDENTS PER

CLASS
= 31,500 / 80 PER CLASS

= 393.75 OR 394 CLASSES

GIVEN EACH STAFF TEACHES EQUIVALENT OF 3 SUBJECTS DURING

ACADEMIC YEAR
NUMBER OF STAFF NEEDED TO COVER CLASSES = 394* 4/3
= 525.33 OR 525 STAFF

0.33 STAFF CANOT BE APPOINTED IN REVENUE BUDGET TO ARRIVE NET

INCOME .

PART C
Exercises that South Hampton may take to suit the creating understudy numbers:

1. re-appropriating the staff

2. Awakening staff to take extra talks by paying persuading powers

3. Select the staff on consistently premise

4. extending the subjects taught each day

4. advertise the work culture of the affiliation and pull in the individuals to join the
affiliation

ANS TO QUES 2

PART A
LABOUR CLASS 1
COMPUTATION OF VARIANCES
DIRECT LABOUR RATE = STANDARD RATE – ACTUAL RATE )
*ACTUAL HOURS PAID
STANDARD RATE PER LABOUR HOUR = $12

ACTUAL LABOURS HOURS WORKED = 750 LABOUR HOURS

ACTUAL RATE = $ 14 PER HOUR

LABOUR PRICE VARIANCE

= ( 12 – 14 ) * 750 = 2* 750 = 1500

LABOUR PRICE VARIANCE = $ 1500

NON FAVOURABLE

2 DIRECT LABOUR EFFICIENCY VARIABLE

 STANDARD RATE PER LABOUR =$ 12

ACTUAL LABOUR HOURS WORKED =750 LABOR HOURS

STANDARD HOURS WORKED =1000 HOURS

STANDARD HOURS FOR ACTUAL OUTPUT =1000

LOBOUR EFFICIENCY VARIABLE = (1000 – 750)*12 =

250*12=3000
LABOUR EFFICIENCY VARIANCE =$ 3,000 FAVOURABLE

LABOUR CLASS 2 : computation of variances

Direct labour rate variance = {standard rate –actual rate }*actual hours
paid
Standard trate per labour hour =22
Actual labour hours worked =1,300 labour hours
Actual rate =$23 per hour
Labour price variance =(22-23)*1,100=2*1,100=1300
Labour price variance =$1300 unfavourable

2 Direct labour efficiency variance =standard hours for actual output –actual
hours worked * standard rate her hour
Standard rate per labour hour =$22
Actual labour hours worked =1,300 labour hours
Standard hours for actual output =1,000
Labour efficiency variance =6,600 unfavourable
ANS TO QUES 2
LABOUR CLASS 3 :

COMPUTATION OF VARIANCES

DIRECT LABOUR RATES VARIENCE = (standard rate –actual rate)*actual

hours paid
Standard rate per labour hour =$26

Actual labour hours worked =1,100 hours

Actual rate =$28

Labour price variation =(26-28)*1,100=2*1,100=2,200

Labour price variance = $2,200
Therefore it is unfavourable .

2 Direct labour efficiency variance =standard hour for actual output- actual
hours worked *standard rate per hour

Standard rate per labour hour=$26

Actual labour hours worked =1,100 labour hours

Standard hours for actual output =1,000

LABOUR EFFICIENCY VARIANCE = (1000-1100)*26=100*26=2,600

LABOUR EFFICEENCY VARIANCE = $2,600

PART B
Points of interest OF STANDARD COSTING:

• Improved cost control.

• More helpful data for administrative arranging and dynamic.

Improved cost control Companies can expand progressively unmistakable cost

control by setting rules for such an expense achieved and subsequently highlighting
exceptional cases or contrasts—situations where things didn't go as organized.
Vacillations give a starting stage to settling on a choice about the feasibility of boss in
controlling the costs for which they are viewed as reliable.

Progressively accommodating information for regulatory organizing and dynamic

When the board makes fitting cost standards and wins with respect to controlling
creation costs, future authentic costs should be close to the standard. In this manner,
the officials can use standard costs in preparing progressively exact spending plans
and in assessing costs for offering on jobs. A standard cost system can be significant
for top organization in masterminding and dynamic.

Weaknesses THAT RESULT FROM A BUSINESS USING STANDARD COSTS

ARE:

Sketchy materiality limits for variances Determining the materiality uttermost ranges
of the distinctions may be debatable. The organization of each business has the
obligation with respect to making sense of what contains a material or astounding
change. Since materiality incorporates particular judgment, various issues or conflicts
may rise in setting materiality limits.

Nonreporting of explicit changes Workers don't by and large report all exclusions or
contrasts. If organization just inspects extraordinary contrasts, workers may not
report negative uncommon cases to the spending plan or may endeavor to confine
these exceptions to cover inefficiency. Workers who win with respect to covering
vacillations decrease the ampleness of arranging.

ANS TO QUES 3
Section A
On the off chance that ASSEMBLY DIVISION HAS SPARE CAPACITY , THERE IS
NO OPPORTUNITY COST ASSOCIATED WITH TRANSFER THEREFORE :
TRANSFER PRICE = OUTLAY COST + OPPORTUNITY COST = $550+0

PART B

TRANFER PRICE = OUTLAY COST + OPPORTUNITY COST = $550+ $130 =$680

OPPORTUNITY COST = FORGONE CONTRIBUTION MARGIN = $680-$550=$130

PART C

ON THE OFF CHANCE THAT ASSEMBLY DIVISION HAS SPARE CAPACITY AND
NO OUTSIDE MARLET EXISTS FOR TRANSFERRED COMPONENT , THE
TRANSFER PRICE SHOULD BE BASED ON VARIABLE COST PER UNIT , $ 550
PLUS A SMALL PROFIT MARGIN TO PROVIDE INCENTIVE FOR ASSEMBLY
DIVISION TO MANUFACTURE AND TRANSFER THE COMPONENT TO THE
ELECTRICAL DIVISION .

PART D

THE SUPPLYING AND BUYING UNITS OF A COMPANY MAY NEGOTIATE A

TRANSFER PRICE THAT IS ACCEPTABLE TO BOTH PARTIES . THE GENERAL
TRANFER PRICING RULE MAY PROVIDE THE MINIMUM TRANSFER PRICE
WHICH BENEFIT THE COMPANY AS A WHOLE AND THE TRANSFER PRICE
MAY FALL BETWEEN THIS PRICE .

ANS TO QUES 4

Section A

The association Dunca's pizza consider the indispensable requirements for the
business as time movement and thing quality.The execution measurment show a
numeric consequence of an assessment that exhibit how well a firm achiving its goals
.Performance measurment is the association among decisions and progressive
goals.It suggests what you should be improve can somehow be qualified.The
execution measurments can be separated into two 1.Output (Competitiveness
,Financial performaance)and 2.Input(Quality,Flexibility,Resourse utalisation and
headway).

Extents of execution of a business generally consolidate five significant yet

interlinking zones
1.Money, commonly evaluated as advantage

2.Productivity

3.Customer satisfation or quality

4.Innovation or adpation of new contemplations and changes

5.Human resources

The standared induvitual execution measures could be

1.Productivity measures

2.Quality measures

3.Inventory measures

4.Lead time measures

5.Preventive upkeep

6.Performance to shedule

7.Utalisation

By virtue of Duncan's pizza They give centrality of perfect transport with out
comprimising nature of the thing .So they need to choose the two measurment
instruments as guideline Quality measurment and gainfulness estimation .Quality
estimation help us to find present giving quality adequate to satisfying customers or
not and Productivity measurment makes a firm perceives how much effectiveness the
association need to pass on quality thing at reasonable rate.Lead time measurment
infers time from when an idea is made untile it is production.Above referenced rest of
the presentation devices in like manner helps with surveying and make a move if
necessery.

PART B

According to Robson ,lan "Implimenting a display measurment structure fit for making
a culture of high performance".This defenition exhibit that if any firm grasping
introduction estimation to know their effitiency and the result shows sucess execution
of a comparable then affiliation must be in a gainful running condition with
exceptional customer dedication . It exhibit association runs with best conditions
 ,employees,customers and their money related security in like manner good.Here
duncans pizza center decided to take two procedures for perfect transport and no
exchange off in quality on the double .Here says They improve result while figuring
with execution appraisel .Which wrap up after this two decition from seniour
mananagement association shows phenomenal execution with better advantage so
their decisions are correct and it has regard.

ANS TO QUES 5 :

PART A

Equal the initial investment Point: It is the purpose of deals at which element neither
wins a benefit nor endures a misfortune. It can likewise be said that the purpose of
deals at which deals estimation of the substance recuperates the whole expense of
fixed and variable nature is called earn back the original investment point.

BREAK EVEN POINT IN UNITS = FIXED COST / CONTRIBUTION PER UNIT

= $ 4,000,000 / $ 3000-$ 2000

= 4,000,000/1000

= 4000 UNITS
PART B
PART B
IF THE FIXED COSTS INCREASES BY THE 10%
NEW BREAK EVER POINT = FIXED COST / CONTRIBUTION PER UNIT
= 4,000,000 * ( 1 + 10%) / $ 3000 - $ 2000

= 4,400,000 / 1000

= 4400 UNITS
PART C
SALES = 5000 TV * 3000 = $ 15,000,000
VARIABLE COST = 5000 TV * 2000
= $ 10,0000,000
CONTRIBUTION = 15,000,000 – 10,000,000
= $ 5,000,000

FIXED COST = $ 4,000,000

NET PROFIT =5,000,000 – 4,000,000

PART D
REVISED SELLING PRICE = $ 2500
VARIABLE COST = $ 2000
REVISED CONTRIBUTION =2500 – 2000
= $ 500
NEW BREAK EVEN POINT IN UNITS = $ 4,000,000 / $ 500
= 8000 UNITS

REFERENCE :

https://corporatefinanceinstitute.com/resources/knowledge/modeling/break-even-analysis/

https://www.investopedia.com/terms/b/breakevenanalysis.asp

https://www.rhythmsystems.com/blog/how-to-improve-on-time-delivery-with-the-right-kpis-culture-
and-disciplines

https://www.researchgate.net/publication/282850088_Importance_of_Competitive_priorities_for_any
_organization

http://www.managementaccountingmastery.com/cima-p3-how-to-calculate-a-transfer-price-matts-
complete-guide/