QUESTION 1

A.
As a manager their responsibility is not only to look after their respective department and ensure
they are operating effectively according to company’s policies and organizational goals. In addition
to leading the departments that have been given to them, they are also responsible for submitting
timely reports to higher authorities such as sales report, balance sheet, cash reserve ratio, profit and
loss and all other reports. They must also provide solutions to any significant problems they arise
within the respective departments.

Mike Tanoto, CEO:

Since Mike is the CEO which is head of overall Dubbo Canoe Pty Ltd he looks after entire
organization and report to Board members. Mike is responsible for Overall Evaluation Report.
This report would contain establishing new and additional policies and standards, corrective
measures, incentive and compensation plans are also included. Moreover, it also contains
organizations performance report through balance sheet, income statement and all. It should be
yearly.

Daine Wisdom, Controller

Controller makes sure that the company's finances are in good shape and they look after day-day
financial operations. Daine prepares Financial Budget Reports which include quantitative
analysis of available funds and financing structure, different expenditures, deficiencies, differences
that is required for allocation of funds. This report is very important for making financial decisions
about the company's operations, financing, and investments. It is issued on daily basis, weekly,
monthly and yearly.

Dora Chan, Purchasing Manager

Purchasing Manager is responsible to submit Procurement Report which is important for decision
making and allocating budget. Procurement report includes requisitions, purchase of materials and
supplies for the whole operation, how well they were used, the current stock balance, how much
money was owed to suppliers, and contracts that were already in place with suppliers. It should be
issued depending on the requirement as on daily, weekly, monthly and all.
Bill Sarimin, Production Manager
The production manager is responsible for preparing Production Report. This production report
includes the number of items made, how much they cost, and how they compare to the standard.
This report should show how much was wasted or went bad because of machine or human
mistakes. The production manager is responsible for preparing Production can include things like
getting materials and sending them out, while manufacturing is all about what happens inside the
plant. Production report are prepared as and when required by the management but however they
are submitted monthly to management.

Angelo Yellow, Kayak Plant Manager

The plant manager at Kayak is in charge of making Overall Plant and Production Report. The
above report includes production volume, production cost, and variances, presenting the total
quantity of goods produced, the actual performance in comparison to the standard. Angelo must
also plan, organize, direct, and operate optimal daily operations in order to fulfil customers'
expectations. Increase output, asset capacity, and adaptability while minimizing wasteful
expenditures and maintaining quality standards. Be accountable for production taking place, its
quality and on time delivery. Report frequency for above is daily.

B.
Direct Cost
Direct cost is expenses that is incurred directly to produce particular products or services. Such as
factory overheads in case of factory. A direct cost is attributable to the cost object, which could be
a service provider, product, or department. Examples of direct costs usually include direct labor
and raw materials. Some of the cost that apply to Dubbo Canoe Pty Ltd are direct labor cost
involved, depreciation on factory building, insurance on factory equipment and electricity for
factory. All expenses which are directly related to manufacture of Kayaks are knowns as direct
cost.

Indirect Cost
All other cost which are not direct cost are indirect cost. Indirect costs are business expenses that
are not readily identifiable with a particular grant, contract, or project function or activity, but are
essential for the organization's general operation and the performance of its activities. Some of the
indirect cost in Kayak plant manufacturing firm are Indirect material used, indirect labor cost
incurred, salary and etc.

Variable Cost:
Variable cost is cost that are not constant. They vary with time and production levels and they are
directly proportional to the production quantity. Moreover, they are opposite to fixed cost. In case
of Dubbo Canoe Pty Ltd, Kayak Manufacturing, labor cost, commission, delivery charges and raw
materials are variable cost.

Fixed Cost
Fixed cost are cost that do not change with volume of production and sales. They remain constant
over the period of times. This is due to the fact that they are not directly involved in producing a
product or providing a service. Consequently, fixed costs are regarded as indirect costs.Fixed cost
that apply in Dubbo Canoe Pty Ltd are rent, salaries, insurance on factory and equipment, loan and
etc.

Uncontrollable Cost
Uncontrollable expenses are those over which an individual has no direct influence. Typically, the
concept applies to a department manager for whom the departmental costs includes multiple line
items over that he has no control. Uncontrollable cost is not within the capacity of Dubbo Canoe
Pty Ltd. Some of the examples of incontrollable cost are administrative overhead expenses,
depreciation on factory equipment, depreciation on factory building, income tax expenses and
council rates.
QUESTION 2
A.

SYDNEY MANUFACTURING PTY LTD

SCHEDULE OF COST OF GOODS SOLD

Raw Material
Opening Inventory $106,800

Purchase of Raw Materials $877,200

Less: Closing Inventory ($70,800)

Cost of Raw Materials Used: $913,200

Less: Indirect Materials Used ($54,000)

Direct Labor $5,68,800

Prime Cost $14,28,000

Manufacturing Overhead

Factory Overhead $6,96,000

Add:
- Indirect Labor $180,000
- Council Rates $108,000
- Depreciation on Factory Building $150,000
- Indirect Materials $54,000
- Depreciation on Factory Equipment $72,000
- Insurance on Factory and Equipment $48,000
- Electricity for Factory $84,000

Total Manufacturing Cost $2,124,000

Add: Work in Process Opening Inventory 0

Less: Work in Process Closing Inventory ($48,000)

Cost of Goods Manufactured $2,076,000

Add: Finished Goods Opening Inventory $42,000

Less: Finished Goods Closing Inventory ($48,000)

Cost of Goods Sold $2,070,000

The raw materials include both direct and indirect materials so in order to get correct calculation of
direct materials I deducted the amount of indirect materials. In case of factory overhead it included
indirect labor, council rates, indirect materials, depreciation on factory building and factory
equipment, insurance on factory and equipment and finally electricity for factory.

INCOME STATEMENT

Sydney Manufacturing Pty Ltd

Income Statement For the Year Ended December 31

Sales revenue $2,546,000

Cost of goods Sold -2,070,000
Gross Profit $476,000
Selling and Administrative expenses ($322,800)
Operating Income $153,200
Income tax Expense ($30,000)
Net Income after tax $123,200
 B.

The Schedule cost of goods manufactured is used to calculate cost of goods produced over a time
in Sydney Manufacturing Pty Ltd. During the period, the cost of goods manufactured is transferred
to the finished products inventory account and utilized to calculate cost of goods sold on the
income statement. Cost of goods manufactured are the actual cost that is incurred in order to
manufacture and produce all goods which is available for sale. On other hand, COGS are those
costs that is incurred for goods that is manufactured but they are also meant for selling.

Schedule cost of goods manufactured is the cost that goes into manufacturing of the items at a
certain landmark time. Despite the fact that the Schedule of Cost of Goods Sold provides a
comprehensive depiction of balances in raw materials, work-in-process, and completed goods
inventories. The amount displayed in the bottom figure is the cost spent for the products sold. For
the purpose of calculating the cost of goods sold, the fluctuation in the inventory of finished items
is either added to or deducted from the cost of goods manufactured. Schedule cost of goods
manufactured and cost of goods sold are inter correlated to prepare income statement of Sydney
Manufacturing Pty Ltd.