Q1 - June 2004 Q17

Amelpa Manufacturing Ltd manufactures a range of industrial products. The budgeted costs of the maintenance section for the current twelve month period have been analysed as follows: Routine maintenance Production line set up Total 151,000 42,000 193,000

The budget was prepared on the basis that there will be 720 set ups and that 10,080 machine hours will be worked. The company has received an enquiry for an order which requires three set ups and will take 56 machine hours. How much (to the nearest 1) should be included in the cost of the order in respect of maintenance costs?

Q2 - Dec 05 Q15
The cost per unit of a product manufactured by Arbor Ltd is: Direct material 12 Direct labour 17 Direct overheads 7 Share of fixed costs 12 Total cost 48 Arbor uses marginal cost plus pricing. If Arbor seeks a 40% margin on sales, what is the selling price of the product?

Q3 - Dec 05 Q20
Admedia Ltd provides an advertising design and production service to clients. The production section is the only customer of the design section, with all design work being transferred at full cost plus 40%. The production section charges clients 90 per hour. In the forthcoming three months, Admedia has budgeted that 7,000 hours will be charged to clients. The budgeted costs are: Variable costs Fixed costs Hours Design Production 29 per hour 35 per hour 56,160 172,000 2,400 7,000

What is the budgeted profit for the two sections?

Q4 - June 06 Q19
Meadaw Ltd operates an activity based costing system. The budgeted costs for warehousing for the next six months are 356,014, of which 215,414 is in respect of handling receipts of materials. The balance is for the issue of goods to production. In the same period, it is expected that 3,700 orders will be received and 2,500 issues will be made. The company has received an order which will generate 14 receipts and 6 issues.

What is the warehousing cost to be included in the total cost of the order?

Q5 - Dec 07 Q18
Themens Co uses activity based costing. The budgeted distribution costs for the next year are: Transport costs $2,631,200 Order processing $1,573,000 Total distribution costs $4,204,200 It is estimated that in the next year, 325,000 orders will be processed, and that the delivery vehicles will travel 1,495,000 km. A customer has indicated that 138 orders, each of which will require a journey of 122 km will be placed in the next year. To the nearest $, what is the distribution cost for this customer?

Q6 - Jun 08 Q17
Capac Co uses activity based costing (ABC). Overhead costs for the next year are: Expense Total expenditure Volume of activity $ Set up costs 1,139,200 3,200 set ups Raw material handling 488,900 5,000 materials orders One of the companys products is manufactured in batches of 500 units, with each batch requiring one set up and 50 materials orders. Using ABC, what is the overhead cost of 220 units?