ACC205 MANAGEMENT ACCOUNTINGCASE STUDY EXCEL GROUP ASSIGNMENT
GROUP NUMBER: ???
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2
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STUDENT ID
FIRST NAME
LAST NAME
PREFERRED NAME
MARKING
QUESTION 1
/18 MARKS
QUESTION 2
/12 MARKS
TOTAL
/30 MARKS
INPUT
QUESTION 1 (18 MARKS)
ACTIVITY BASED COSTING (ABC)
Alexander Custom Furniture has five indirect-cost pools (purchasing, material handling, machine maintenance, prod
and packaging). The company is in the process of bidding on two jobs:
1) Job 0802: an order of 15 intricate personalised furniture.
2) Job 2408: an order of 6 standard personalised furniture.
The controller wants you to compare overhead allocated under the simple job-costing system and newly designed a
job-costing system. Total budgeted costs in each indirect-cost pool and the budgeted quantity of activity driver are a
Budgeted
Overhead
Purchasing
$70,000
Material handling
Machine maintenance
Product inspection
Packaging
$87,500
$237,300
$18,900
$39,900
$453,600
Activity Driver
Purchase orders
processed
Material moves
Machine-hours
Inspections
Units produced
Budgeted
Quantity of
Activity Driver
4,000
10,000
21,000
3,780
7,980
Information related to Job 0802 and Job 2408 follows. Job 0802 incurs more batch-level costs because it uses mor
materials that need to be purchased, moved and inspected relative to Job 2408.
Number of purchase orders
Number of material moves
Machine-hours
Number of inspections
Units produced
Job 0802
25
10
40
9
15
Job 2408
8
4
60
3
6
REQUIRED:
a) The total overhead allocated to Job 0802 under a simple costing system, where overhead is allocated ba
machine-hours.
b) The total overhead allocated to Job 2408 under an activity-based costing system using the appropriate a
drivers.
c) In general, explain TWO advantages and TWO disadvantages of Activity Based Costing (ABC).
OUTPUT
machine maintenance, product inspection
stem and newly designed activity-based
antity of activity driver are as follows:
costs because it uses more types of
overhead is allocated based on
(4 marks)
m using the appropriate activity
(10 marks)
Costing (ABC).
(4 marks)
OUTPUT
INPUT
QUESTION 2 (12 MARKS)
VARIANCE ANALYSIS
During October, Natuzzi Ltd produced 3,900 turbines, and the accounting records indicated the following actual dat
Direct material purchased
Direct material used
Direct labour
10,000 kilograms
9,550 kilogram
15,100 hours
@
$4.70 per kilogram
@
$20 per hour
@
@
$4.50 per kilogram
$19 per hour
The turbine has the following standard prime costs:
Direct material:
Direct labour hours:
Standard prime cost per unit
2.5 kilograms
4 hours
$11.25
$76.00
$87.25
REQUIRED:
a) For the month of October, calculate the following variances, indicating whether each is favourable or un
i)
Direct material price variance (calculated at time of purchase).
ii)
Direct material quantity/efficiency variance.
iii)
Direct labour rate variance.
iv)
Direct labour efficiency variance.
b) Based on the answers to the above, suggest TWO possible reasons for the materials price variance and
possible reasons for the labour efficiency variance.
OUTPUT
ated the following actual data:
er each is favourable or unfavourable:
(2 Marks)
(2 Marks)
(2 Marks)
(2 Marks)
aterials price variance and TWO
(4 marks)
OUTPUT
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