DPA40113: Display whether the company should buy or continue to manufacture the components: COST AND MANAGEMENT ACCOUNTING 2 Assignment, PM, Malaysia

Question 2

It is given that three points, P(4,6), Q(2,-2) and R(-5, 7) lie on a Cartesian plane. S is the midpoint of the straight line PQ. Find

(a) the gradient of the straight line SR.

(b) the equation of the straight line SR.

Question 3

(QUESTION 1

The management of Wind Chime Bhd is facing some problem deciding whether to make or buy BT21 component. The company currently manufactures 50,000 units of this component per year at the following costs:

BT21 costs/unit RM

Materials 5.00

Labour 2.50

Variable overhead 3.50

Fixed overhead 7.00

Total 18.00

The fixed overhead is absorbed based on production hour. The company has received a quotation of Rm15.50 per component from outside supplier.

You are required to:

a) Display whether the company should buy or continue to manufacture the components. Support your answer with figures based on financial consideration only

b) If it is found that to continue manufacturing BT21 component would restrict the output of a new product CT21 by 40,000 units per annum, display the prove of affect for ‘make or buy’ decision. The new selling price of the products is RM20 per unit and its marginal costs is RM12 per unit k .

QUESTION 2

TINY TAN Sdn. Bhd. produces three types of special toys. The information about a unit of toy is as follows:

The accountant has identified that there were only 14,600 kg of materials and 8,400 hours of  direct hours to produce their product.

In order to help the company maintaining the maximum profit, you are required:

a) Displays which factor has the limiting factor

b) Displays the ranking in which the product should be manufactured based on limiting factor

c) Justify how many units of each product should be manufactured based on the limiting factor.

d) Determine ONE (1) situation that contribute to the scarce of resources of the company

QUESTION 3

LineFriend.My manufactures and sells handcrafted wooden button for local market in Malaysia. The company was in the process of preparing next month’s budget. The budgeted Statement of Comprehensive Income for the current month shown below: RM

Revenue 1,350,000
(-)Variable costs: (600,000)
Contribution Margin 750,000
(-)Fixed costs (452,000)
OPERATING INCOME 298,000

a. The handcrafted wooden button sold at RM45 per unit. Calculate:

i. Break-even point (unit and RM)

b. The company plan to have a profit of RM548,100 for next month. Besides, for the coming year the management LineFriend.My anticipates a 10% decrease in variable costs and a RM20,000 decrease in fixed expenses. (Use two decimal points in your calculation)

i. Displays the new break-even point in both UNIT and RM.

i. How many wooden buttons MUST BE SELL to achieve expected profit for  next month?

QUESTION 4

Butter Ltd supplied the following information regarding their three products to the year 2021

Required:

a) Constructs the relevant information on a Profit-volume graph and indicate the break-even sales clearly

b) Displays the break-even point in sales value (RM) for each product individually

Answer

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