Description Determine the cost function from the following information using Account Analysis metho ...
Description Determine the cost function from the following information using Account Analysis method. Expense Amount Variable Fixed Direct Materials $400,000 400,000 Direct Labor 200,000 200,000 Rent 25,000 25,000 Insurance 15,000 15,000 Commissions 180,000 180,000 Telephone Expenses 20,000 20,000 Depreciation 70,000 70,000 Power & Light 30,000 30,000 Admin Salaries 40,000 40,000 Additional Information: 1) During the year 100,000 units were produced and sold. 2) Selling price per unit was $ 4. Required: Determine the cost function using units produced as the cost driver. Determine the cost function using Sales ($) as the cost driver. Suppose Ali Inc. has budgeted next years’ sales at 12,000 units of a product. The selling price per unit is SAR 90, Variable Cost per unit is SAR 30, and Total Fixed Cost is SAR 450,000. (5 Marks) Akbar Inc. expected to use 25,000 Direct Labour hours this year; overhead is allocated to WIP using Direct Labour Hours. Job # 5 shows total cost of $ 15,000. An inspection reveals that 15% of Job # 5 must be scrapped and sold for $ 200. Job # 5 was originally a batch of 8000 units. (5 Marks) Determine the Following: BEP in units Contribution Margin Ratio BEP in Sales (SAR) Margin of Safety Percentage Degree of Operating Leverage Requirement: Prepare Journal Entry to record the spoilage and the sale of the scrap if the spoilage is considered normal and is not due to the demanding specification of Job # 5. Determine the manufacturing cost per units for the good units in Job # 5, if the spoilage is considered normal and is not due to the demanding specification of Job # 5. Prepare Journal Entry to record the spoilage and the sale of the scrap if the spoilage is considered abnormal and occurred due to the demanding specification of Job # 5. Determine the manufacturing cost per units for the good units in Job # 5, if the spoilage is considered abnormal and occurred due to the demanding specification of Job # 5.
