“Let’s fight, Help and Win” 
Managerial Accounting HI5017 Assignment Sample
WEEK 1
a) Prepare a schedule of cost of goods manufactured for Nani’s fashion
|
Particulars |
Amount |
|
Direct material(W.N.1) |
$ 97,500.00 |
|
Direct Labour |
$ 100,000.00 |
|
Manufacturing overhead(W.N.2) |
$ 82,500.00 |
|
Beginning work in progress |
$ 20,000.00 |
|
Less: Ending Work in Progress |
$ (15,000.00) |
|
Cost of Goods Manufactured |
$ 285,000.00 |
|
Working Notes |
|||
|
Direct materials used |
|||
|
Particular |
Amount |
Particular amount |
Amount |
|
To Opening raw materials |
$ 20,000.00 |
By raw materials invetory ending |
$ 12,500.00 |
|
To Purchase of raw materials |
$ 90,000.00 |
Direct materials used |
$ 97,500.00 |
|
$ 110,000.00 |
$ 110,000.00 |
|
Manufacturing overhead |
|
|
Particulars |
Amount |
|
Depreciation of plant and equipment |
$ 30,000.00 |
|
Indirect material |
$ 5,000.00 |
|
Indirect labour |
$ 7,500.00 |
|
Other manufacturing overhead |
$ 40,000.00 |
|
$ 82,500.00 |
b) Create the schedule of cost of goods sold and interpret the results
|
Particulars |
Amount |
|
Direct material(W.N.1) |
$ 97,500.00 |
|
Direct Labour |
$ 100,000.00 |
|
Manufacturing overhead(W.N.2) |
$ 82,500.00 |
|
Beginning work in progress |
$ 20,000.00 |
|
Less: Ending Work in Progress |
$ (15,000.00) |
|
Cost of Goods Manufactured |
$ 285,000.00 |
|
Beginning Finished goods inventory |
10000 |
|
Less: Ending finished goods inventory |
-25000 |
|
Cost of goods sold |
$ 270,000.00 |
Interpretations
The cost of the good sold value of Nani's fashion business is $270000 which is less than its sales revenue that shows the performance of an entity. This showcase the effects of an entity in keeping less proportion of cost as compared to the revenue.
c) Prepare an income statement for the present year
|
The income statement of Nani's fashion |
|
|
For the year ended 2020 |
|
|
Particualrs |
Amount |
|
Sales revenues |
$ 475,000.00 |
|
Less: COGS |
$ 270,000.00 |
|
Gross revenue |
$ 205,000.00 |
|
Selling and administration |
$ 75,000.00 |
|
Electricity |
$ 20,000.00 |
|
Depreciation |
$ 30,000.00 |
|
Operating income |
$ 80,000.00 |
|
Income tax expense |
$ 45,000.00 |
|
Net profit |
$ 35,000.00 |
WEEK 2
a) Estimate electricity cost using the high low method and determine the variable electricity cost per hour
|
Month |
Total hours of operation |
Total electricity costs |
|
January |
650 |
$ 4,240.00 |
|
February |
700 |
$ 4,400.00 |
|
March |
800 |
$ 4,800.00 |
|
April |
600 |
$ 4,200.00 |
|
May |
550 |
$ 3,700.00 |
|
June |
500 |
$ 3,600.00 |
|
$ 24,940.00 |
|
Hours of operation |
Electricity costs |
|
|
Highest |
800 |
$ 4,800.00 |
|
Lowest |
500 |
$ 3,600.00 |
|
variable cost per unit |
Highest electricity costs-lowest electricity costs/ |
|
|
Highest hours of operation-Lowest hours of operation |
||
|
4800-3600 |
||
|
800-500 |
||
|
variable cost per unit |
4 |
|
|
Fixed costs |
|
|
Total costs |
(variable cost per unit*units) |
|
$ 24,940.00 |
(4*300) |
|
$ 24,940.00 |
1200 |
|
Fixed cost |
$ 23,740.00 |
|
Y |
a+bx |
|
A |
fixed cost |
|
B |
variable rate |
|
Y |
$ 24,940.00 |
b) Estimate the complex’s total electricity costs using the cost estimation method for July
|
Y |
a+bx |
|
A |
fixed cost |
|
B |
variable rate |
|
A |
$ 23,740.00 |
|
B |
4 |
|
X |
570 hours of operation in July |
|
Complex's total electricity costs in July |
$ 26,020.00 |
c) State the drawback of high low method
One of the drawbacks of the high low method is its complexity that involves multiple steps in predicting the behavior of costs. By requiring several steps, it is very time-consuming that increases the time of decision in business.
Another disadvantage of this approach is that the results give approximate numbers and not an exact one. It is not suitable for analyzing the exact decision as its results are estimated for the case sensitive business.
WEEK 3
a) Journals entries to show the compleetion of top production and costs involve in it
|
Date |
Particular |
J.F |
Debit |
Credit |
|
|
To work in progress inventory |
|
$5826 |
|
|
|
By Finished goods |
|
|
$5826 |
|
|
(Being production costs for job A26 recorded with $4850 direct material, $640 direct labor $336 of overhead) |
|
|
|
No journal entry of shipping will record in the books of account unless the payment is received from the buyer.
b) Calculate the cost per cuddly koala for job A26
|
Sale price |
|||
|
Particulars |
Cost |
Units |
Rate |
|
Direct materials required |
4850 |
1000 |
4.85 |
|
Direct labor |
20 |
||
|
Overhead |
10.5 |
||
|
Cost of one koala |
35.35 |
||
c) How managers at Toys world use the above information
The managers of Toys world use the cost per cuddle in determining the selling price of this toy and sells to the local shops. The margin rate is added in the cost per rate of cuddly toy and distributes in the market.